Employee PF and ESI due-date dispute remanded; vehicle depreciation disallowance deleted for company use consistency.

Employee's contribution to provident fund and ESI, when challenged on the basis of the relevant due date, was sent back for fresh factual examination in light of the governing precedent, with only statistical relief granted on that point. Depreciation on vehicles was disallowed by the Revenue for alleged personal use, but the Tribunal deleted the addition, holding that a company cannot be attributed personal use in the same sense as an individual and that earlier-year allowance, absent contrary material, called for consistent treatment. The appeal thus resulted in partial relief, with one issue remanded and the depreciation disallowance set aside.

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Issues: (i) Whether disallowance of employee's contribution to provident fund and ESI under section 36(1)(va) read with section 2(24)(x) required deletion or remand. (ii) Whether disallowance of vehicle depreciation on the ground of personal use was sustainable.

Issue (i): Whether disallowance of employee's contribution to provident fund and ESI under section 36(1)(va) read with section 2(24)(x) required deletion or remand.

Analysis: The assessee did not dispute the jurisdictional High Court ruling that delayed deposit of employees' contribution beyond the statutory due date is liable to be disallowed. The dispute was confined to whether the relevant due date should be tested with reference to the month of salary payment. Following the coordinate bench view relied upon in the record, the Tribunal considered it appropriate to have the factual position examined afresh by the Assessing Officer in the light of that approach.

Conclusion: The issue was remanded to the Assessing Officer for fresh adjudication; the assessee obtained only statistical relief.

Issue (ii): Whether disallowance of vehicle depreciation on the ground of personal use was sustainable.

Analysis: The assessee had not furnished usage details, but the Tribunal applied the settled principle that a company, being a distinct legal entity, cannot have personal use of assets in the same sense as an individual. The Tribunal also noted that depreciation on the vehicles had been allowed in earlier years and no contrary material was brought to show a different treatment in later years, so consistency required similar treatment for the year under appeal.

Conclusion: The disallowance of depreciation was deleted and the assessee succeeded on this issue.

Final Conclusion: The appeal resulted in partial relief: one issue was sent back for reconsideration, while the depreciation disallowance was set aside.

Ratio Decidendi: Where employees' contribution is disputed on the question of the relevant due date, the matter may be remanded for factual verification in the light of the governing precedent; and a company cannot be attributed personal use of vehicles, especially where the Revenue departs from an earlier consistent allowance without contrary material.

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