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2014 (5) TMI 45 - AT - Income TaxAddition u/s 36(1)(va) r.w. section 2(24)(x) of the Act Delayed remittance of EPF contribution and ESI Subscriptions Held that:- The decision in CIT V/s. Sabari Enterprises [2007 (7) TMI 169 - KARNATAKA HIGH COURT] followed section 36(1)(va) clear that amounts actually paid on or before the due date of filing return u/s 139 are allowable deductions The Explanation Clause (va) of Section 36 of the Income Tax Act further makes it very clear that the amount actually paid by the assessee on or before the due date applicable in this case at the time of submitting returns of income under Section 139 of the Act to the revenue in respect of the previous year can be claimed by the assessees for deduction out of their gross income - contributions by assessee to P.F. & Employees State Insurance are deductible even if made beyond period prescribed u/s 36(1)(va) but before the due date for furnishing return Decided in favour of Assessee. Disallowance of professional charges Permissibility of disallowance u/s 14A after the adjudication made by the DRP - Held that:-In view of amendment to S.144C of the Act, by the Finance Act, 2012 with effect from 1.4.2009, whereby it has been explained that 'the power of the DRP to enhance the variation shall include and shall be deemed always to have included the power to consider any matter arising out of the assessment proceedings relating to the draft order, notwithstanding that such matter was raised or not by the eligible assessee - Relying upon Aurobindo Pharma Ltd. V/s. Asstt. Commissioner of Income-tax[2014 (4) TMI 27 - ITAT HYDERABAD] - There was no infirmity in the action of the AO, in sustaining the addition, not in terms of S.14A of the Act, but on grounds of absence of evidence brought on record by the assessee to substantiate its claim as to the genuineness of the expenditure, as held by the DRP Decided against Assessee. Addition of professional charges made u/s 40(a)(ia) of the Act Held that:- DRP had followed the decision in Merilyn Shipping & Transports Versus Assistant Commissioner of Income-tax, Range-1, Visakhapatnam [2012 (4) TMI 290 - ITAT VISAKHAPATNAM], and the same decision is being pending in the High Court thus, the matter is remitted back to the AO for fresh adjudication Decided in favour of Assessee. Deduction u/s 10A of the Act - Interest income not considered part of the profits Held that:- The decision in Livingstones Jewellery (P) Ltd. V.s. Dy. CIT [2009 (5) TMI 617 - ITAT MUMBAI ] followed when sub-section (1) of section 10A is read in juxtaposition to sub-section (4), the only the profit and gains as derived by the undertaking from the export of articles cannot be accepted as eligible for deduction - All the profits which have nexus with the business of the undertaking will qualify for deduction - the assessee had given FDRSs to the bank for obtaining credit facility - Such interest has nexus with the business of the undertaking and falls under the head "Profits and gains of business or profession' as having relation with the carrying on of the business - Decided against Assessee. Deduction u/s 10A of the Act - Foreign exchange fluctuation not considered part of profits Held that:- The decision in Commissioner of Income Tax Versus M/s. Gem Plus Jewellery India Ltd. [2010 (6) TMI 65 - BOMBAY HIGH COURT] followed - an assessee would be eligible for relief under S.10A in respect of foreign exchange gain earned on realisation of export receipts in the year of export thus, the order of the DRP set aside and the AO is directed to recomputed the relief u/s 10A of the Act Decided in favour of Assessee. Deduction u/s 10A of the Act Expenses in foreign exchange towards telephone and interest charges Held that:- The deduction is allowed and the order of the DRP is set aside the AO id directed to recompute the eligible deduction under S.10A of the Act, excluding the expenditure in the form of telephone, internet charges, etc., which have been deducted from the export turnover, from the total turnover as well Decided in favour of Assessee.
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