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2016 (1) TMI 231 - PUNJAB AND HARYANA HIGH COURT

2016 (1) TMI 231 - PUNJAB AND HARYANA HIGH COURT - TMI - Addition made on account of late deposit of employees' contribution to PF - ITAT deleted the addition - Held that:- Issue covered against the revenue by judgment of the Apex Court in Commissioner of Income Tax vs. Alom Extrusions Limited, (2009 (11) TMI 27 - SUPREME COURT) - Decided on favour of assessee.

Disallowance of depreciation by taking the whole of the building as let out and income was assessed under the head income fr .....

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ed by the CIT(A) as well as the Tribunal. - Decided on favour of assessee in part. - ITA No. 214 of 2010 - Dated:- 21-9-2015 - MR. AJAY KUMAR MITTAL AND MR. RAMENDRA JAIN, JJ. For The Appellant : Mr. Tajender K.Joshi, Advocate For The Respondent : Ms. Radhika Suri, Sr. Advocate with Ms.Rajni Pal, Advocate Ajay Kumar Mittal,J. 1. The revenue has preferred this appeal under Section 260A of the Income Tax Act, 1961 (in short, the Act ) against the order dated 19.6.2009, Annexure A.III passed by the .....

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the fact that the payments were made beyond the due dates and were therefore not allowable under section 36(1)(va) and were to be treated as income under section 2(24)(x) of the Income Tax Act, 1961, in contravention of the decision in the case of CIT vs. Pamwi Tissues Limited, 215 CTR 150 (Bom.)? II) Whether, on the facts and in the circumstances of the case, the learned ITAT was right in law in confirming the order of the learned CIT(A) in deleting the addition of ₹ 19,30,846/- made by t .....

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nce available on record as disallowance of ₹ 14,23,431/- on account of depreciation on let out building was made by the Assessing Officer as the assessee had failed to adduce, any rent agreement, the portions of building let out and used for purposes of business as claimed by assessee was not verifiable and without giving an opportunity of being heard for necessary verification by the Assessing Officer decided the issue? 2. A few facts relevant for the decision of the controversy involved .....

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on of ₹ 14,23,431/- on account of depreciation in respect of whole of the building as let out and addition of ₹ 19,36,019/- on account of late payment of employees' contribution to Provident Fund and ₹ 19,30,846/- on account of employer's contribution to EPF and FPF. The assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 13.9.2007, Annexure A.II, the appeal was partly allowed giving relief of ₹ 51,55,171/- to the asses .....

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rder dated September 27, 2010, the appeal was admitted to consider question No.III only. 5. With regard to question Nos. I and II, while considering identical question, a Division Bench of this Court in Commissioner of Income Tax vs. Rai Agro Industries Limited, (2011) 334 ITR 122 following the decision of the Apex Court in Alom Extrusions Limited's case (supra) held as under:- 5. The point for determination in this appeal is, whether the amendment made by Finance Act, 2003, effective from 1 .....

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f this provision is to discourage those assesses who failed to clear their statutory liability relating to payment of excise duty, employees contribution to provident fund etc. within time whereas they laid claim for deductions in respect thereof from their income on the plea that liability to pay these amounts had occurred during the relevant previous year. After the insertion of Section 43B, the assessee was entitled to claim deduction on account of these payments only on actual payments even .....

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herever it was established that it had been discharged, though not during the previous year, but before the due date for filing of return under Section 139(1) of the Act. However, the second proviso which related to liabilities falling under clause (b) had more rigid conditions. The second proviso, which is relevant for decision of this appeal, reads thus: Provided further that no deduction shall, in respect of any sum referred to in clause (b), be allowed unless such sum has actually been paid .....

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erein it was held that it is curative in nature and would apply retrospectively, with effect from,April 1, 1988. The relevant observations of the Supreme Court are as under (Page 316): .........We hold that the Finance Act, 2003, to the extent indicated above, is curative in nature, hence, it is retrospective and it would operate with effect from April 1, 1988 (when the first proviso came to be inserted). For the above reasons, we find no merit in this batch of civil appeals filed by the Departm .....

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77; 14,23,431/- on account of depreciation by taking the whole of the building as let out and income was assessed under the head income from house property . On appeal by the assessee, the CIT(A) upheld the action of the Assessing Officer in disallowing the depreciation on the rented building but held that since the total area in dispute relating to Plot Nos.131 and 235 which was shared for purposes of sister concerns came to 1,27,993 square feet i.e. 1/10th of the actual property involved, the .....

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been discussed in para 3 to 7 and the learned AR's arguments appeared at page 13 of the paper book vide letter addressed to the ACIT, Range II, Faridabad, on this point from pages 13 to 19 of the said paper book. During the discussions with the learned AR, he has left the matter regarding the treatment of income from business to income from house property to be decided on merits. Keeping in view the present position of the entire facts and circumstances and the arguments and discussions hel .....

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ciation should be disallowed only to the extent of 1/10th and not the entire depreciation, as the rest of the building is almost clearly the factory premises of the said rented building. Therefore, 1/10th of ₹ 12,09,031/- comes to ₹ 1,20,903/- and of ₹ 14,23,431/- comes to ₹ 1,42,343/- and these are disallowed accordingly and the balance disallowances are deleted in both the assessment years. 7. On appeal by the revenue, the Tribunal affirmed the findings recorded by the .....

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