TMI Blog2009 (6) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,088/- (AY 2000-01) on the let out building to its sister concern by ignoring the jurisdictional ITAT order passed in ITA No.3011/Del/99 for the AY 1995-96 in the case of M/s Lakhani Footwear, 131, Sector 24, Faridabad. 2. Apropos Ground No.1, learned DR contends that the issue about payment of employees contribution within due date prescribed by PF/ESI Act still continues to be governed by Section 36(va) read with Section 43B of the Income-tax Act. Therefore, the effective provisions for allowing such contribution is to the effect that the payment of employees contribution should be made within the due date prescribed by the PF/ESI Act. In the instant case, the payments have been made belatedly, therefore, AO rightly disallowed payments made for employees contribution. It was contended that the ITAT Benches are allowing both employer and employees contribution as covered by Hon ble Supreme Court judgment in the case of CIT vs Vinay Cements Ltd., 231 CTR 268, in fact the issue in this case set at rest as under: In the present case we are concerned with the law as it stood prior to the amendment of Section 43B. In the circumstances, the assessee was entitled to claim the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed before us. Hon ble Delhi high Court in the case of P.M. Electronics (supra) has referred to both employer and employees contributions and its allowability, if the amount is paid before the due date of the filing of the return. Learned DR has endeavored to make out a case that in the cases of Vinay Cement Co. (supra) and George Williamsons (Assam) Ltd. (supra), the courts were seized with employers contribution, however, we have to respectfully follow the Hon ble Delhi High Court judgment in the case of P.M. Electronics (supra). It has not been disputed that the assessee has made payments of employees contribution within due date of filing of return. In view thereof, we uphold the order of CIT(A) on this issue. This ground of revenue is dismissed. 6. Apropos second ground of revenue, learned DR relies on the order of AO. 7. Learned counsel for the assessee contends that depreciation was disallowed under a mistaken impression by AO. Assessee had let out 10% part of the factory premises to its associated concerns for administrative work which facilitated the assessee s group operations, rent was charged from such associated concerns and offered as business income. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the finding of CIT(A) is based on factual verification, which is supported by assessee s submissions before AO. In view thereof, we see no infirmity in the order of the CIT(A), which is upheld on this issue. 9. In the result, both the appeals of revenue are dismissed. 10. In Revenue s appeal No.3208/Del/07 for Asstt. Year 2003-04, following grounds are raised: 1. On the facts and in the circumstances of the case, the ld. CIT(A) erred in deleting the addition of ₹ 2,33,576/- made by the AO as the assessee failed to furnish any evidence which can show that the security expenses of directors were incurred wholly and exclusively for business purposes. 2. On the facts and in the circumstances of the case, the ld. CIT(A) erred in deleting the addition of ₹ 47,88,425/- made by the AO u/s 2(24)(x0 read with section 36(1)(va) of the Income-tax Act,1961 on account of late payment of employee s as well as employer s contribution to PF, EPF and FPF in terms of second proviso to section 43B without appreciating the fact that the payments were made by the employer beyond the due date prescribed. 3 On the facts and in the circumstances of the case, the ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture of ₹ 2,33,576/- paid to Haryana Govt. police Department for providing security to the working directors of the company can have no element of personal nature involved or the expenditure is of capital nature but is an expenditure wholly and exclusively incurred for the business purposes. The ld. AR has brought to my notice the order of my predecessor dated 22.4.99 in appeal No.11/98-99 in the case of M/s Lakhani Footwear Ltd. assessment year 1995-96, wherein similar expenditure was incurred and the Board resolution was passed sanctioning such expenditure and it was ruled out to be business expenditure and was, therefore, allowed. On the similar facts and circumstances of the case, the expenditure of ₹ 2,33,576/- is also treated to be business ex0endiutre and is, thus allowed u/s 37(1) of the I.T. act and disallowance is accordingly deleted. 13. We have heard the rival contentions and perused the material on record. In our view, assessee has adduced sufficient evidence before CIT(A) in respect of threat to which the MD was exposed. The security of MD is a concern for the business of the assessee company and the police will not provide armed escorts unless the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of LADT on such stock can be actually determined. Since the closing stock held cannot be called to be exclusively held for manufacture in respect of onward inter-state sales, LADT cannot be imputed to the closing stock. (iii) LADT was contingent on determination of inter state sales and corresponding utilization of imported raw material. It was contended that in any case the levy is not attributable to goods, however, the same is dependent on many contingencies, which crystallizes after the year end, therefore, it cannot be towards the cost of the goods. (iv) Whenever the LADT is refunded, the same will be offered for taxation. 19. We have heard the rival contentions and perused the material on record. Ld. CIT(A) deleted this addition by following observations: I have carefully considered the submissions of the ld. AR and perused the order of assessment. The nature of entry tax or LADT being as such it has nothing to do with the goods, it cannot become part of stock as such it has nothing to do with the goods, it cannot become part of stock as it did not relate to it and hence, was not worked out by the appellant company or disclosed in the books of account. Hen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction Co. (P) Ltd. (1996) 4 CLJ 233 applied. 21. We have heard the rival contentions and perused the material. Learned CIT(A) deleted this addition by following observations: I have carefully considered the submissions of the ld. AR and perused the order of assessment. It is now established that the company is a juristic entity and if any disallowance out of the personal use of cars is to be made, it can be made only as a perquisite in the hands of the directors and not in the hands of the company. Therefore, the disallowance of ₹ 1,41,018/- out of car expenses worked out by the AO, is deleted. It has not been disputed that assessee is a legal entity. Reliance on the case of Haryana Oxygen Ltd. (supra) is well founded. In view thereof, order of CIT(A) is upheld on this issue. As such this ground of revenue is dismissed. 22. In the result, appeal of revenue is dismissed. 23. Assessee has raised following ground for Assessment Year 2003-04: 1. On the facts and circumstances of the case, the ld. CIT(A), Faridabad, was not justified to confirm the addition made by ACIT Range-II, Faridabad for ₹ 1,53,319/- in respect of interest paid to the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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