TMI Blog2022 (7) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... before the due date of filing of return of income will not suffice to escape from the provisions of section 36(1)(va) of the Act. Since it is a fact on record that the employees contribution was deposited delayed as per the applicable provisions of law, the issue stands covered against the assessee. The disallowance on account of delayed deposit of employee s contribution to ESI is accordingly upheld. Disallowance u/s 14A - disallowance of expenses incurred for the purposes of earning incomes - CIT-A deleted the addition - HELD THAT:- We see no reason to interfere in the order of the Ld.CIT(A) who deleted the disallowance finding sufficient interest free funds available with the assessee for the purpose of making the investments. This fact has remained uncontroverted before us. It is a settled position of law that where sufficient own funds are available, the presumption is that the investments have been made out of the same calling for no disallowance of interest u/s 14A of the Act - we uphold the order of the Ld.CIT(A) deleting the disallowance made u/s 14A. Disallowance u/s 40(a)(ia) interest on late payment - non deduction of tax at source - said interest expenses p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urance and car fuel expenses - AO disallowed 1/3rd of the total expenses incurred by the assessee on cars on various accounts attributing personal use to them noting that all of them were luxurious, expensive and the least fuel efficient cars, the assessee has used more than one car for business purpose during the year under consideration and the assessee did not furnish any log book relating the usage of above cars to distinguish business personal uses - HELD THAT:- Both the AO and the Ld.CIT(A) have resorted to estimation for the purposes of disallowing car expenses on account of non-business user. We see no reason to interfere in the order of the Ld.CIT(A) whose disallowance of 20% of the fuel expenses we find is justified considering that there is no basis with the Revenue also for justifying disallowance of 1/3rd of entire car expenses which definitely is in our considered view on the higher side - we uphold the order of the Ld.CIT(A) deleting disallowance of car expenses. - ITA No. 290/Rjt/2016 - - - Dated:- 6-5-2022 - Ms. Annapurna Gupta, Accountant Member And Shri Mahavir Prasad, Judicial Member For the Appellant : Shri Chetan Agarwal, A.R. For the Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne through the audit reports of both the years and I find that there is no difference in stock at all. This is a simple case of clerical mistake. Hence the addition is deleted. 5. Before us Ld.DR relied on the order of the AO, though was unable to controvert the factual findings of the Ld.CIT(A) that the audited financial statements of the assessee reflected no such difference. 6. The Ld.Counsel for the assessee filed submissions in writing before us reiterating the contentions made before the lower authorities. The relevant extract of his submissions are as under: 1) There was a typographical mistake which was clerical in nature in filing proper schedules in ITR-4 for A.Y. 2012/13. 2) There was also some technical error in generation of Xml file of income tax return for A.Y. 2012/13. 3) In fact, there is no discrepancy whatsoever in the figures of opening and closing stock shown in the income tax return Form ITR-4 for the A.Y. 2013/14. 4) The A.O. has not considered opening stock of Rs. 4,03,38,986 shown as on 01/04/2012 only for the reason that the corresponding closing stock as on 31/03/2012 is shown at Rs. Nil in the ITR-4 for A.Y. 2012-13. 5) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of ESI is concerned, I am inclined to agree with the appellant that since the payment has been made on or before due date of filing the return of income, the disallowance is not warranted. Hence, deleted. 12. Before us Ld.DR contended that the issue stands decided against the assessee by the decision of the jurisdictional High Court in the case of CIT vs Gujarat State Road Transport Corporation (2014) 366 ITR 170(Guj) . 13. Ld.Counsel for the assessee was unable to distinguish the decision of the jurisdictional High Court ,but at the same time relied on the order of the Ld.CIT(A) and reiterated the contentions made before him in writing before us also as under: (ii) Addition of Rs.9028/- on account of late payment of employees contribution u/s. 36(1)(va)/43B. The assessing officer has made addition of Rs.4,701/- on account of delayed payment of employees contribution to ESI for the month of August 2012 paid on 05/10/2012 without appreciating the fact that the though the payment was late but the same was deposited on or before the due date of filing of return of income and therefore the same is allowable as deduction. 14. Having heard the rival cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6/99,613/- (being peak) on 09-04-2012. Only peak has to be taken as the appellant go on purchasing selling the funds on regular basis. Because the interest free fund available is more than fund invested, the disallowance of expenses U/S.14A does not arise. Hence, deleted. 19. Before us Ld.DR though was unable to controvert the factual findings of the LD.CIT(A),he however relied on the order of the AO 20. Ld.Counsel for the assessee on the other hand relied on the order of the Ld.CIT(A) and reiterated his contentions made before the Ld.CIT(A) ,which briefly summarized are as under: Investment in mutual fund is one time process and once investment is made, it automatically yields dividend income and the assessee need not to incur any expenses or devote any time to earn such dividend income. Hence, there is no direct or indirect expenses which can be said to have been incurred to earn dividend income and in absence of having incurred any expenditure in relation to such dividend income, the question does not arise to apply provisions of Section 14A in so far as exempted income in the form of dividend is concerned. Also, the assessee is having interest free funds in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,550/- made by AO on account of disallowance u/s 40(a)(ia) interest on late payment. 24. The issue relates to disallowance made of interest expenses amounting to Rs.12,92,550/- on account of non deduction of tax at source, as per the provisions of section 40(a)(ia) of the Act. The said interest expenses pertained to that paid to the creditor of the assessee M/s Hero Moto Corp. Ltd for delay in payments against various purchases. 25. The Ld.CIT(A) deleted the disallowance finding that interest paid to creditors is not in the nature of interest as envisaged in the definition of interest u/s 2(28A) of the Act and hence the said interest was not covered u/s 40(a)(ia) of the Act. The relevant findings of the Ld.CIT(A) at para 6.5 of his order is as under: 6.5 So far as ground of appeal against disallowance of Rs.12,92,550/u/s.40(a)(ia) is concerned, I am inclined to agree vith the appellant's submission that the TDS on interest is not envisaged in the-provisions on the interest paid to sundry creditors. This interest is in normal course of trading activity and is not at par with interest on loan/borrowing. Hence question of disallowance u/s.40(a)(ia) does not arise. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er that the assessee has paid any amount for transportation of goods separately than the cost of the goods purchased by it. Ostensibly, in such circumstances, there would not arise any necessity of deduction of tax at source on the freight amount separately shown in the Invoices, in terms of section 194C of the Act. Therefore, following the parity of reasoning laid down by the Hon ble Jurisdictional in the case of Food Corporation of India (supra) the amount raised by M/s Tata Steel in the invoices shown as freight did not create an obligation on the assessee to deduct tax on such amounts as per section 194C of the Act. In our view, if the freight expenses incurred by M/s Tata Steel are added to the cost of goods in the invoice raised, it cannot be inferred that the assessee has paid any amount of freight separately because the same is part of the cost of product purchased. The assessee could not be said to be an assessee in default for non deduction of tax at source in terms of section 194C of the Act on the amount of freight billed separately by M/s Tata Steel. As a consequence, it follows that the provisions of section 40(a)(ia) of the Act cannot be applied to disallow the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance of traveling expenses Rs.4,11,483/- is concerned, this consists of foreign travel as well as inland travel within India. Before me the appellant has not been able to justify the foreign travel. However, the claim of travel within India for business purpose cannot be brushed aside altogether, but personal element too cannot be denied. Hence, foreign travel expenses of Rs.70,043/- Rs.50,000/- from travel expenses within India is confirmed and balance is deleted. 41. The Ld.DR though relied on the order of the AO was unable to controvert the fact that the assessee had business transactions with the Hero Moto Corp Group ,nor was he able to point any infirmity in the findings of the Ld.CIT(A) that domestic travelling could not be ruled out completely in the aforestated backdrop of facts. 42. In view of the same we see no reason to interfere in the order of the Ld.CIT(A) deleting the disallowance of travelling expenses of Rs.2,91,440/-. 43. Ground of appeal No.6 is dismissed. 44. Ground no. 7 reads as under: The Ld.CIT(A) erred on facts and in law in deleting Rs.10,46,251/- out of Rs.12,30,193/- made by AO on account of personal nature expenses out of ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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