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2014 (2) TMI 1209 - AT - Income TaxDisallowance of interest u/s 14A read with rule 8D - CIT(A) deleted the disallowance in part - Held that:- CIT(A) observing that the facts are identical to the facts of the Assessment Year 2005-06, by following the order of the Tribunal passed in the case of the assessee itself in Assessment Year 2005-06 has restricted the disallowance u/s 14A to 2% of the dividend income and deleted the balance amount of disallowance. - Decided against revenue Disallowance being 50% of payment made to related party towards fees and legal charges - CIT(A) deleted the disallowance - Held that:- The genuineness of the payment is not in dispute. The Assessing Officer after observing about the loss incurred by the assessee company has brought no material on record after making investigation to show that the assessee has not received the services for which payments were made by the assessee. Rather, on the other hand, the allowance of deduction at the rate of 50% shows that the Assessing Officer also agreed that services of the staff of the payee company were utilized by the assessee company for its business purpose. No material was brought on record to show that the consideration for services received by the assessee was so excessive as to warrant any disallowance out of the same. It is also observed that the amount of consideration paid was as per Memorandum of Understanding entered into by the assessee with the payee company. In view of the above facts and circumstances, we do not find any good reason to interfere with the order of the Ld. CIT(A) - Decided against revenue Disallowance u/s 36(1)(va) read with section 2(24)(x) being the employees’ contribution to Provident Fund not deposited within the stipulated time - Held that:- Hon’ble Gujarat High Court in the case of CIT Vs. Gujarat State Road Transport Corporation (2014 (1) TMI 502 - GUJARAT HIGH COURT ) held that with respect to the sum received by the assessee firm from any of his employees to which provisions of sub-clause (x) of clause (24) of section (2) applies, the assessee shall be entitled to deduction in computing the income referred to in section 28 with respect to such sum credited by the assessee to the employees’ account in the relevant fund or funds on or before the “due date” mentioned in explanation to section 36(1)(va).the issue was covered in favour of the Revenue by the above cited decision of the Hon’ble Gujarat High Court. Therefore, we set aside the order of the Ld. CIT(A) and restore back the order of the Assessing Officer. - Decided in favour of revenue
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