TMI Blog2014 (7) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 (8) TMI 77 - BOMBAY HIGH COURT] - the Assessee has suo moto disallowed u/s. 14A - no further disallowance over and above then what is made by the Assessee u/s. 14A read with Rule 8D is called for – Decided in favour of Assessee. Disallowance u/s 43B – Employees contribution to ESIC paid beyond prescribed dates – Held that:- The amount of employees contribution towards ESIC has been deposited beyond the due dates prescribed under the relevant Act – Relying upon COMMISSIONER OF INCOME TAX II Versus GUJARAT STATE ROAD TRANSPORT CORPORATION [2014 (1) TMI 502 - GUJARAT HIGH COURT] - employees share of contribution of ESIC was paid after the prescribed due date, there was no reason to interfere with the order of CIT(A) – Decided against Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade applicable from the Assessment Year 2008/09 and was not applicable to the year under consideration. Under the facts of the case Id. CIT (A) ought to have accepted the voluntary disallowance offered by the appellant for taxation u/s 14A of the act. 2. Ld. CIT (A) has erred in law and on facts in confirming disallowance of ₹ 47, 403/- made by AO u/s 43B of the act. Both the lower authorities failed to appreciate that the Employees contribution to ESIC though paid beyond the dates prescribed, was paid before the due date of filing of return. Ld. CIT (A) ought to have deleted the disallowance in light of various judicial authorities cited before him. 1st ground is with respect to confirming disallowance of ₹ 2,72,587/- u/s. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance under section 14 A, assessing officer disallowed expenses relatable to exempt income as per rule 8D. Up to 2007-08 the method to arrive at disallowable expense was estimation. Thereafter rule 8D was framed which gives formula to disallowance of expenses relating to exempt income. For interest, proportionate expense is disallowable whereas for other expenses .5% of investment value is disallowable. Appellant disallowed ₹ 25,000 under section 14 A without any basis. Considering the fact that appellant claimed more than RS 16 crores administrative and other expenses, the disallowance of administrative expenses made by the assessing officer rupees 57288 is quite reasonable and therefore the same is confirmed. As regards interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er book to demonstrate the availability of funds. She therefore submitted that no disallowance u/s. 14A was called for. The ld. D.R. on the other hand relied on the order of A.O and CIT(A). 7. We have heard the rival submissions and perused the material on record. It is an undisputed fact that Assessee had earned tax free income in the form of dividend to the tune of ₹ 2,08,945/-. Before us, Assessee has submitted that the interest free funds available with the Assessee are in excess of investments. This fact has not been controverted by Revenue by bringing any contrary material on record. We find that Hon ble Gujarat High Court in the case of CIT vs. Amod Stamping P. Ltd. 2014 45 Taxman. com 427 (Guj.) relying on the decision in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd perused the material on record. In the present case, it is an admitted fact that the amount of employees contribution towards ESIC has been deposited beyond the due dates prescribed under the relevant Act. The Hon ble Gujarat High Court in the case of Gujarat State Road Transport Corporation in ITA No 637/AHD/2013 has held as under:- any sum with respect to the employees contribution as mentioned in s. 36(l)(va), assessee shall be entitled to the deduction of such sum towards the employees contribution if the same is deposited in the accounts of the concerned employees and in the concerned fund such as Provident Fund, ESI Contribution fund, etc provided the said sum is credited by the assessee to the employees accounts in the relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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