The Pune bench of the Income Tax Appellate Tribunal ( ITAT) directed re-adjudication for the disallowance made under section 40(a)(a) of the Income Tax Act,1961 on the ground of violation of non-deduction of tax under section 194H of the Income Tax Act.
Classic Citi Investments Pvt. Ltd, the appellant assessee was a company engaged in the hotel and hospitality business. The assessee claimed depreciation on fixed assets under section 32 of the Income Tax Act. The assessing officer disallowed the claim and confirmed the order of the assessing officer by the National Faceless Appeal Centre(NFAC). Thus the assessee appealed against the order passed by the NFAC.
Sanket M. Joshi, the counsel for the assessee contended that the assessee was entitled to claim a deduction if the employee‟s contribution was paid before the due dates of filing the return of income(ROI).
It was also submitted that the Commissioner on an examination of the Tax Audit Report held that the assessee did not deposit the amount of which was employee‟s contribution before the due date under the prescribed Acts and confirmed the disallowance made by the assessing officer for the delay in depositing the said employee‟s contribution before due dates concerning under section 40(a)(ia) of the Income Tax Act.
Ramnath P. Murkunde, the counsel for the revenue contended that the assessee could not furnish final bills or certification of addition to fixed assets in respect of work done or goods supplied and no evidence filed to prove that the assets had been purchased and used for business activities.
It was also submitted that the assessee was not entitled to claim deduction due to the nonpayment of the employee‟s contribution within due dates. The two-member bench comprising Inturi Rama Rao(Accountant) and S.S. Viswanethra Ravi (Judicial) held that the order passed by the assessing officer without the application of mind and directed the assessing officer to re-adjudicate for allowing the claim of depreciation while allowing the appeal filed by the assessee.
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