Tribunal Ruling: Depreciation Disallowed, ESIC Contributions Allowed

The Tribunal upheld the deletion of additional depreciation claimed under section 32(1)(iia) of the Income Tax Act, citing precedents favoring the assessee. Regarding the delay in depositing ESIC and labor welfare fund contributions, the Tribunal ruled in favor of the assessee, agreeing with the Ld. CIT(A) that contributions made before the due date of filing the return of income should be allowed, directing the deletion of the addition to the total income. The Tribunal dismissed the Revenue's appeal, emphasizing the minimal amount involved and the timely deposit of contributions.

---

---

Issues:
1. Claim of additional depreciation under section 32(1)(iia) of the Income Tax Act.
2. Delay in deposit of employees ESIC and labour welfare fund contribution.

Analysis:
Issue 1: Claim of additional depreciation under section 32(1)(iia) of the Income Tax Act
In this appeal, the Revenue challenged the deletion of additional depreciation amounting to &8377; 3,18,05,283 under section 32(1)(iia) of the Act. The Tribunal noted that similar issues had been decided in favor of the assessee in previous assessment years by coordinate benches. Referring to the decisions in ITA No 6360/mum/2017 and ITA No 7268/mum/2017, the Tribunal upheld the findings of the Ld. CIT(A) and dismissed the Revenue's appeal regarding the additional depreciation claim.

Issue 2: Delay in deposit of employees ESIC and labour welfare fund contribution
The second issue pertained to the delay in depositing employees' ESIC and labor welfare fund contributions. The Ld. CIT(A) examined the matter in detail, considering various case laws and judicial pronouncements. The Ld. CIT(A) referred to the decision in CIT vs. Ghatge Patil Transports Ltd. where it was held that contributions, whether by employees or employers, should be allowed if deposited before the due date of filing the return of income. The Tribunal agreed with the Ld. CIT(A) that there should be no distinction between employees' and employers' contributions for the purpose of deduction under section 43B of the Act. The Tribunal observed that the contributions were made before filing the return of income, and hence, no disallowance under section 36(1)(va) was warranted. Consequently, the Tribunal directed the AO to delete the addition of &8377; 18,116 made to the total income of the assessee under section 36(1)(va) and allow the said addition under section 43B of the Act.

In conclusion, the Tribunal dismissed the Revenue's appeal, considering the minimal amount involved and the slight delays in depositing the contributions. The Tribunal found the Ld. CIT(A)'s conclusions consistent with previous decisions and upheld the deletion of the addition in favor of the assessee.

---