TMI Blog2022 (8) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowance of employees contribution to PF by invoking provisions of Section 2(24)(x) r.w.s. 36(1)(va) - HELD THAT:- We observe that the assessee deposited Employees Contribution to Provident Fund before due date for filing return of income. We find that in the case of CIT Vs. AIMIL Limited [ 2009 (12) TMI 38 - DELHI HIGH COURT] has held that no disallowance of PF/ESI contribution is called for when the amounts are deposited before filing the return of income. Thus, we delete the disallowance made towards employees contribution towards Provident Fund. Disallowance of depreciation on trucks purchased - trucks were not put to use - assessee submits that assessee purchased trucks on 31.03.2014 and claimed depreciation as the asset was ready to put to use - AO denied depreciation on the ground that trucks are not complete and they cannot be put to use - HELD THAT:- We direct the AO to consider the entire cost of trucks including body for the purpose of allowing depreciation in the AY 2014-15 and not on the reduced WDV as furnished by the assessee after assessee claiming the depreciation in the AY 2013-14. Addition of interest payment on the ground that advance given to Kamal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of crane is not genuine. 3. The Ld. Counsel for the assessee submits that the AO disallowed depreciation on crane purchased by the assessee during the AY 2013-14 holding that purchase of crane is not genuine. The Ld. Counsel submits that depreciation on crane was also disallowed by the AO for the assessment years 2014-15 and 2015-16. The Ld. Counsel for the assessee submits that assessment for the AY 2017-18 was selected for compulsory scrutiny on the basis of the disallowance of depreciation on crane made in the AY 2013-14 and sustained by the Ld. CIT(A). The Ld. Counsel referring to page 19 of the Paper Book submits that the order sheet noting clearly shows that assessment for AY 2017-18 was selected for compulsory scrutiny to disallow depreciation on crane as was done for the assessment years 2013-14 to 2015-16. The Ld. Counsel for the assessee submits that in the course of assessment proceedings for the AY 2017-18 it was submitted before Assessing Officer that the assessee could not furnish confirmation from supplier of the crane as the assessee bought this crane through broker and the missionary imported not directly connected with the supplier of the missionary and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustained by the CIT(A) on the issue of disallowance of depreciation on crane purchased for want of confirmation from the supplier of machinery. During the course of assessment proceedings the assessee submitted that depreciation on the crane cannot be denied just because the confirmation could not be done at the time of original assessment for the AY 2013-14. The assessee further submitted that the company bought this crane through broker which is second hand imported machinery and it is not directly connected with the supplier of the machinery and as the payment has been made on the advice of broker at Bombay through RTGS therefore the confirmation is not in its hand. The assessee also requested to get it physically verified that crane is in existence in the factory premises and working for TATA Steel Ltd. as the assessee company is the handling agent of TATA Steel. In view of the request of the assessee the Inspector of this office was deputed to make field enquiry and submit report on the issue. The Inspector vide this report dated 28.11.2019 submitted that crane bearing no. NL-02-K- 6510, Model No. 650, Serial No. 47022, Chasis 9809, CARR No. 853900, Upper AY 853800 exists ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L Limited (321 ITR 508) has held that no disallowance of PF/ESI contribution is called for when the amounts are deposited before filing the return of income. Thus, respectfully following the said decision, we delete the disallowance made towards employees contribution of Rs.1,20,067/- towards Provident Fund. 8. ITA No. 3284/Del/2018 (AY 2014-15) Coming to AY 2014-15 the assessee has raised the following effective grounds: 1. The Ld. CIT(A) has erred on facts and in law in confirming the disallowance of depreciation of Rs.11,98,500/- on the crane purchased by the assessee in AY 2013-14 on the ground that in that year it is held that purchase of crane is not genuine. 2. The Ld. CIT(A) has erred on facts and in law in confirming the disallowance of depreciation of Rs.5,25,000/- on the trucks purchased on 31.03.2014 by holding that the same were not put to use or even not fit to be used on 31.03.2014. 3. The Ld. CIT(A) has erred on facts and in law in confirming the disallowance of Rs.5,26,198/- out of the interest payment by holding that advance given to M/s Kamal Steel Fabricators and Agarwal Enterprises is not for commercial expediency and also without cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of interest payment on the ground that advance given to Kamal Steel Fabricators and Aggarwal Enterprises is not for commercial expediency. The Ld. Counsel for the assessee referring to pages 43 44 of the Paper Book submits that assessee has advanced 2.45 crores to its sister concern and it is a running account between assessee and its sister concern. The ld. Counsel submits that sister concern makes purchases from the assessee and also sales to the assessee and, therefore, there is commercial expediency in advancing monies to sister concern. The Ld. Counsel submits that as a matter of fact at the end of the year assessee took more money then it advanced to its sister concern. 15. The Ld. Counsel further submits that the assessee advanced Rs.4 crores to Aggarwal Enterprises in the month of March, 2014 and the said advance was re-paid by Aggarwal Enterprises on 25.04.2014 and the advance was given only for a month. 16. The Ld. Counsel further submits that these advances are given from out of reserve and surplus and not out of borrowed funds and, therefore, no notional interest can be disallowed. The Ld. Counsel further referring to page 48 of the Paper Book submits that bor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtent of 17.19 crores and the outstanding balance as on 31.03.2014 in the case of Kamal Steel Fabricators stood at 2,45,36,627/- and in the case of Aggarwal Enterprises at Rs.3,93,40,000/-. Therefore, since the share capital and reserves and surplus are much more than the advances given by the assessee to Kamal Steel Fabricator and Aggarwal Enterprises there is a presumption that the advances were given out of share capital, reserve and surplus. Thus, the ratio of the decisions relied on supports the assessee s contention. Thus, respectfully following the said decisions the disallowance made by the AO towards interest is deleted. 19. ITA No. 5485/Del/2018 (AY 2015-16) The only issue in this appeal relates to disallowance of depreciation on crane. We have decided this issue in favour of the assessee deleting the disallowance of depreciation on crane for the AY 2013-14 for the reasons given therein, we hold that the decision taken for the appeal for AY 2013-14 applies mutatis mutandis for the appeal for AY 2015-16. Accordingly, we direct the AO to delete the disallowance made towards depreciation on crane for the AY 2015-16. 20. In the result, the appeals for the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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