Case Number: ITA 1683/DEL/2020
Appellant: Vcare Call Centers India Pvt Ltd, GB Nagar
Respondent: JCIT Range-27, New Delhi
Assessment Year: 2017-18
Result: Appeal allowed
Case Filed on: 2020-10-13
Order Type: Final Tribunal Order
Date of Order: 2022-08-12
Pronounced on: 2022-08-12
This case involves Vcare Call Centers India Pvt Ltd, GB Nagar, challenging the disallowance of depreciation on a vehicle and the late deposit of Provident Fund (PF) and Employee State Insurance (ESI) contributions for the assessment year 2017-18. The appeal was filed against the order of the Commissioner of Income Tax (Appeals)-9, New Delhi.
The primary issues in this case were the disallowance of depreciation on a vehicle registered in the name of the director but used for business purposes and the disallowance of late deposit of PF/ESI contributions. The Assessing Officer disallowed the depreciation claim of Rs. 1,03,008 and the late deposit of PF/ESI amounting to Rs. 16,44,679.
The appellant, represented by Shri Manish Kumar, Adv., argued that the vehicle was used exclusively for business purposes and that the purchase money and insurance premium were paid by the company. Therefore, the claim of depreciation and insurance premium should be allowed. The appellant also argued that late deposits of PF/ESI contributions should be allowed as they were made before the due date of filing the return of income under section 139(1) of the Income-tax Act.
The respondent, represented by Shri M. Barnwal, Sr. DR, upheld the disallowance, stating that the vehicle was registered in the name of the director and not the company, and that the late deposits were not allowable as per the provisions of the Act.
The tribunal, comprising Dr. B. R. R. Kumar, Accountant Member, and Shri Anubhav Sharma, Judicial Member, noted the following:
The tribunal referred to the judicial precedent in the case of MM Fisheries P. Ltd Vs. CIT, where it was held that ownership of an asset by a director in his personal capacity cannot be deemed to be ownership by the company. However, since the vehicle was used exclusively for business purposes and the expenses were borne by the company, the tribunal allowed the depreciation claim, following the principle of consistency as the same claim was allowed in earlier assessment years.
The tribunal referred to the Supreme Court decision in CIT v. Alom Extrusions Ltd, which set the precedent that late deposits of PF/ESI contributions are allowable if made before the due date of filing the return of income under section 139(1). The tribunal also noted that this issue was covered by the order in ITA Nos. 1265, 1266, 1267, 1383, 1384 & 1392/Del/2021, where similar grounds were allowed.
The tribunal allowed the appeal filed by Vcare Call Centers India Pvt Ltd, directing the allowance of depreciation on the vehicle and the deduction of late deposit of PF/ESI contributions. The tribunal found no reason to disallow the claims in the absence of any change in the facts of the case from earlier assessment years.
The order was pronounced in the open court on 12th August 2022, bringing clarity on the treatment of depreciation and late deposit of PF/ESI contributions for the assessment year 2017-18.
Order:
The appeal filed by Vcare Call Centers India Pvt Ltd is allowed, with the depreciation on the vehicle and the deduction of late deposit of PF/ESI contributions being permitted.
Author: Accountant Member, Dr. B. R. R. Kumar
Date: 12.08.2022
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform