Law: Income Tax Act, 1961

Section: 32,32(1)(ii),43(3),43B

JUDGMENT P.D. Dinakaran, J. - The Revenue filed the appeals challenging the order of the Tribunal dated 14-5-1999 in ITA Nos. 1959 and 1696/Mds./1997 raising the following questions of law: "(i)Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the assessee is entitled to 100 per cent depreciation under section 32(1)(ii) of the Income-tax Act, 1961 on gas cylinders and spindles ? (ii)Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in deleting the disallowance of Rs. 1,45,399 being the provident fund payments applying the provisions of section 43B of the Income-tax Act, 1961?" 2.1 The assessee is a company engaged in the business of leasing and hire-purchasing. The assessee claimed 100 per cent depreciation with regard to certain assets leased out, namely, gas cylinders and spindles. The Assessing Officer refused to grant 100 per cent depreciation in respect of those assets on the ground that they should be used collectively and cumulatively, and not individually and in isolation. On appeal, the said finding of the Assessing Officer was confirmed by the CIT(A). 2.2 Similarly, the Assessing Officer also disallowed the contributions made by the assessee toward provident fund under section 43B of the Income-tax Act (for brevity "the Act") on the ground that the payments made by the assessee after the due date under the relevant statute, viz., the Provident Fund Act, even though they were made during the accounting year, would not be deductible as per the second proviso to section 43B of the Act then in force. On appeal, the CIT(A) sustained the said disallowance. 2.3 The assessee preferred appeals before the Tribunal, which, by order dated 14-5-1999, accepted the contentions of the assessee on both the issues and allowed 100 per cent depreciation on the gas cylinders and spindles and also allowed the payment of Provident Fund contributions under section 43B of the Act. 2.4 Hence, the Revenue has preferred the above appeals, on the questions of law referred to above. 3.1 Point (i)-"Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in…

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