Division Bench upholds Tribunal decision on PF deposits, ESI contributions, and depreciation disallowance.

The Division Bench upheld the Tribunal's decision in the case regarding late deposits of employees' and employer's contributions to PF. Referring to the Alom Extrusions Limited case, the Bench held that the Finance Act, 2003, applied retrospectively from April 1, 1988. Consequently, the assessee's claims for ESI contributions were allowed, and disallowance under Section 43B was not applicable. Regarding the disallowance of depreciation on a let-out building, the Tribunal affirmed the CIT(A)'s decision to disallow depreciation only on the portion of the building that was let out, dismissing the revenue's appeal.

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Issues:
1. Late deposit of employees' contribution to PF.
2. Late deposit of employer's contribution to EPF and FPF.
3. Disallowance of depreciation on let-out building.

Issue 1: Late deposit of employees' contribution to PF
The revenue appealed against the ITAT's decision to delete the addition of employees' contribution to PF, made by the Assessing Officer. The revenue argued that the payments were made beyond due dates and should be treated as income under the Income Tax Act. However, the Tribunal dismissed the appeal. The Division Bench referred to the Alom Extrusions Limited case, where it was held that the Finance Act, 2003, which omitted the second proviso to Section 43B, would apply retrospectively from April 1, 1988. Consequently, the Tribunal was correct in allowing the claim of the assessee regarding payments made for ESI contributions, and the same could not be disallowed under Section 43B.

Issue 2: Late deposit of employer's contribution to EPF and FPF
Similarly, the revenue contested the deletion of the addition of employer's contribution to EPF and FPF by the CIT(A) and ITAT. The Division Bench, following the Alom Extrusions Limited case, upheld the Tribunal's decision. The Tribunal correctly allowed the claim of the assessee, and the revenue's appeal was dismissed.

Issue 3: Disallowance of depreciation on let-out building
The Assessing Officer disallowed depreciation on the entire building as let out, leading to the income being assessed under "income from house property." The CIT(A) partially upheld the disallowance, considering only 1/10th of the building as let out for sister concerns. The Tribunal affirmed the CIT(A)'s findings, stating that only 10% of the area was let out, and depreciation was disallowed to that extent. The revenue's appeal was dismissed as no error was found in the CIT(A) and Tribunal's decisions. The substantial questions of law were answered accordingly, and the appeal was dismissed.

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