CIT vs. NET 4 INDIA LTD

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ITA - 1694 / 2010HC Delhi08 November 20101 pages
For Petitioner: SONIA MATHUR
AI SummaryDismissed

What did the High Court hold?

The High Court held that for the first issue, it is not disputed that the employees' contribution was paid before the filing of the return. In such circumstances, the expenditure incurred was to be allowed as a business expenditure, as settled by the Court in CIT v. Aimil Ltd. For the second issue, the Court noted that depreciation on UPS is admissible at 60%, a position previously decided by the Court in CIT v. BSES Yamuna Power Ltd. The Court found that no question of law arises for consideration in either issue. The appeal was dismissed.

What were the facts?

The appeal concerns assessment year(s) not specified. The assessee is challenging the disallowance of ₹34,63,246 on account of delayed payment of employees' contribution to ESI and provident fund, and a disallowance of ₹5,18,287 for excess depreciation claimed on UPS. The Assessing Officer disallowed the employees' contribution despite it being paid before the filing of the return. For the UPS, the Assessing Officer was of the view that depreciation should be allowed at 15% instead of the 60% claimed by the assessee. The appeal is before the High Court of Delhi.

What were the issues?

1. Whether the disallowance of ₹34,63,246 on account of delayed payment of employees' contribution to ESI and provident fund, made under Section 36(1)(va) of the Income Tax Act, is valid, when the payment was made before filing the return? The assessee contends that since the payment was made before filing the return, the expenditure should be allowed as a business expenditure, citing the decision in CIT v. Aimil Ltd. The revenue's contentions are not recorded. 2. Whether the disallowance of ₹5,18,287 on account of purported excess depreciation charged by the assessee on UPS is justified, where the assessee claimed 60% depreciation and the Assessing Officer proposed 15%? The assessee relies on the decision in CIT v. BSES Yamuna Power Ltd. for the admissibility of 60% depreciation on UPS. The revenue's contentions are not recorded.

Which sections of the Income-tax Act were involved?

Section 36(1)(va)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . 08.11.2010 . Present: Ms. Sonia Mathur, Advocate for the Appellant. Mr. Manu K.Giri, Advocate for the Respondent. . + ITA No.1694/2010. . In this appeal two issues are raised which are as under:- 1. Disallowance of ` 34,63,246/- on account of delayed payment of employees contribution of ESI and provident fund made under Section 36(1) (va) of the Income Tax Act. 2. Disallowance of ` 5,18,287 on account of purported excess depreciation charged by the assessee on UPS. . . In so far as first issue is concerned, it is not in dispute that the contribution was made before filing of the return. In such circumstances, expenditure incurred was to be allowed as business expenditure. The issue in this behalf has been settled by the judgment of this Court in the case of CIT v. Aimil Ltd. 229 CTR 418. In so far as the second issue is concerned, the assessee had claimed depreciation on the UPS @ 60% whereas the Assessing Officer was of the view that depreciation should be allowed @ 15%. On UPS the depreciation is admissible @ 60% which aspect against this has been decided by this Court in the case of CIT v. BSES Yamuna Power Ltd., ITR No. 1267/2010 decided on . -2- 31.10.2010. We find that no question of law arises for consideration. Dismissed. A.K. SIKRI, J. . SURESH KAIT, J. NOVEMBER 08, 2010 hk . #1

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