ITAT deletes Addition since Contribution to EPF and ESI was deposited before due date of filing Income Tax Return [Read Order]

The Cuttack bench of Income Tax Appellate Tribunal in Das & Sons Infracon Pvt. Ltd Vs. DCIT, deleted the addition since contribution to EPF and ESI was deposited before the due date of filing Income Tax Return.

In instant case, none appeared on behalf of assessee due to the strike of Bar Council of Odisha and pleaded for adjournment petition which was rejected by the tribunal and disposed off the appeal according to the situation.

Pursuant to the notice under section 143(2) & 142(1) of the Act counsel for assessee appeared for discussion before AO and he completed assessment making addition on account of excess depreciation @15% and also made addition on account of the differential figure in respect of income received as finance commission and insurance commission.

The matter contested before CIT (A), wherein the appellate authority after considering the submission and fact of the case deleted the addition made on account of suppression of gross receipt and confirmed the additions made on account of depreciation @15% and addition made on account of EPF and ESI and partly allowed the appeal of the assessee.

Being aggrieved assessee carried the matter to this tribunal but none of them appeared. Accordingly, the bench decided the decision based on the facts and circumstances of the case.

The bench observed the issue regarding disallowance of excess depreciation on the vehicle used on hire as predominantly use of the assessee and declaration of the vehicles is for assessee’s own business and, therefore, the assessee is not entitled to excess depreciation.

Regarding the disallowance on account of late payment of EPF and ESI contribution, the bench including judicial member Pavan Kumar Gadale and accountant member N.S Saini observed as” The addition was made on the ground that the employees’ contribution to EPF & ESI were not deposited within the time prescribed under the P.F.Act. We find that no disallowance can be made for deduction of the same u/s.36(1) (va) r.w.s.2(24)(x) of the Act”.

The bench while considering the judgment of apex court in Rajasthan State Beverages Corporation Ltd., directed the AO to delete the addition since the contribution to EPF and ESI was deposited by assessee within the due date of filing return of income.