INCOME TAX ACT, 1961

--Business disallowance under section 43B--Cess, duty, fees, etc. Payment of PF and ESI contributions within grace period and relevant year itself--It was observed by assessing officer that PF and ESI contributions were paid belatedly and as such not allowed as deduction. It was contention of assessee before Commissioner (Appeals) that amounts were paid within due dates and further amounts were also paid within the year itself. Therefore, following principles laid down by jurisdictional High Court, amounts paid within the grace period should have been allowed. Further, the assessee also took recourse to Supreme Court judgment in case of CIT v. Alom Extrusions Ltd. 2009 TaxPub(DT) 2109 (SC) : (2009) 319 ITR 306 (SC) for the proposition that since amounts were paid within financial year/before filing of return itself, amounts should be allowed. Commissioner (Appeals) however, confirmed the order of assessing officer holding that there is no substance in contentions. Held: Most of payments were paid within grace period itself or within year itself. Even otherwise, amounts were paid before filing return of income, in any case assessing officer is directed to allow ESI and EPF contributions.

Income Tax Act, 1961, Section 43B

INCOME TAX ACT, 1961

--Business expenditure--Vehicle and plant repairs and maintenance expenses Ad hoc disallowance in case of company--Assessee claimed certain amount as deductions on account of plant repairs and maintenance and under head 'vehicle maintenance'. Assessing officer disallowed 15 per cent, of repairs and maintenance and 20 per cent, of the vehicle expenses on reason that supporting evidence furnished was not verifiable as they were self-serving vouchers. Commissioner (Appeals) upheld order of assessing officer. It was contention of assessee that it was a case of a public limited company and all vouchers are maintained and the accounts are duly audited. It was also submitted that assessee is an agro-based chemical company and accordingly, there is a lot of expenditure on repairs and maintenance of plant and machinery and vehicles and since assessing officer did not point out any defects in vouchers expenditure was allowable. Held: Acceptable. In case of company no ad hoc disallowance could be made in case of vehicle expenses and repairs and maintenance of plant and machinery.