Business expenditure and employee PF/ESI deductions upheld where payment was made timely and prior years' view applied.

Privilege fees paid to the State Government were treated as allowable business expenditure, following the Tribunal's earlier view in the assessee's own cases, and not as an appropriation of profit. Employees' contributions to provident fund and ESI, having been deposited before the due date for filing the return, were also held deductible under the applicable section 43B principle. On both issues, the disallowances were not sustained and the relief granted at the appellate stage was upheld.

---

---

Issues: (i) Whether privilege fees paid to the State Government was allowable as revenue expenditure; (ii) Whether employees' contribution to PF and ESI deposited before the due date of filing the return was deductible.

Issue (i): Whether privilege fees paid to the State Government was allowable as revenue expenditure.

Analysis: The payment of privilege fees had already been held by the Tribunal in the assessee's own earlier years to be an allowable business outgoing. The issue for the year under consideration was identical, and the same reasoning was followed. The payment was treated as business expenditure and not as an appropriation of profit.

Conclusion: The issue was decided in favour of the assessee.

Issue (ii): Whether employees' contribution to PF and ESI deposited before the due date of filing the return was deductible.

Analysis: The contributions were deposited before the due date for filing the return, and the legal position applied by the Tribunal treated such payment as allowable under section 43B. The issue was also covered by earlier decisions in the assessee's own case, and the disallowance was not sustained.

Conclusion: The issue was decided in favour of the assessee.

Final Conclusion: The revenue's challenge to both additions failed, and the assessment relief granted by the appellate authority was sustained.

Ratio Decidendi: Where an identical issue has already been decided in the assessee's favour in earlier years, and employees' contribution is deposited before the due date of filing the return, the corresponding expenditure is allowable and the disallowance cannot be sustained.

---