Court Rules on ESIC Contributions & Depreciation Set-Off, Orders Consistent Revenue Approach

The court concluded that the disallowance of Employees' Contributions to ESIC paid beyond due dates did not raise any substantial question of law, considering a previous decision by the Bombay High Court. Regarding the claim of set-off of unabsorbed depreciation beyond 8 years, the court expressed disappointment at the Revenue's inconsistent approach and adjourned the hearing to allow for a proper response. The Revenue was directed to ensure a consistent approach and seek assistance from the Additional Solicitor General in the next hearing for clarity and resolution.

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Issues:
1. Disallowance of Employees' Contributions to ESIC paid beyond due dates under ESIC Act.
2. Claim of set-off of unabsorbed depreciation of assessment year 2000-01 beyond 8 years.

Analysis:
1. The first issue raised in the appeals challenges the disallowance made under Section 36(1)(Va) read with Section 2(24)(x) of the Income-Tax Act regarding Employees' Contributions to ESIC paid by the assessee-Company beyond the due dates under ESIC Act for Assessment Years 2009-10 and 2010-11. The Revenue contended this disallowance, but the Counsel for Revenue acknowledged that a similar issue was decided against the Revenue in a previous case by the Bombay High Court. Consequently, it was concluded that this issue did not present any substantial question of law.

2. The second issue in the appeals concerns the claim of set-off of unabsorbed depreciation of the assessment year 2000-01 beyond the period of 8 years. The Revenue highlighted conflicting decisions by the Bombay High Court on this matter. Despite some appeals being dismissed, subsequent appeals on the same issue were admitted without considering the earlier decisions. The Court expressed disappointment at the Revenue's approach, emphasizing the need for consistency in legal matters. The Court adjourned the hearing to allow the Revenue to provide a proper response and explanation for the inconsistent stance taken. The Court also directed the Revenue to ensure a consistent approach and requested the Additional Solicitor General's assistance in the next hearing for further clarity and resolution of the matter.

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