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2014 (10) TMI 796 - AT - Income TaxInterpretation of section 43B Interest on service tax outstanding Held that:- The object of section 43B of the Act is to curb the activities of those taxpayers who do not discharge their statutory liability of payment of tax or duty, for a long period but claim deduction from the income on the ground that the liability to pay this amount incurred by them in the relevant previous year, the interest payable to service tax is also a tax and the provisions of section 43B of the Act are very much applicable thereto Relying upon Mewar Motors Versus Commissioner of Income-Tax [2002 (9) TMI 51 - RAJASTHAN High Court] - interest payable to the sales tax department is also tax and the provisions of section 43B of the Act are applicable as the payment of due service tax is a statutory liability - interest payable on the delayed payment of due service tax cannot be treated as different from the payment of service tax by the assesee thus, the provisions of section 43B are applicable on non-payment of interest on the delayed payment of due service tax - The authorities have rightly disallowed the amount as interest on service tax outstanding under the provisions of section 43B of the Act Decided against assessee. Addition u/s 40(a)(ia) - Amount outstanding as on the close of the year paid and evidence furnished Held that:- While deciding the issue the CIT(A) has not specifically addressed the contention of the assessee that with the document in support that whatever amount of TDS was due on 31.3.2009 was duly paid before the due date of filing the return u/s 139 (i) of the Act thus, the matter is to be remitted back to the AO for fresh adjudication Decided in favour of assessee. Addition u/s 14A - Applicability of Rule 8D - Expenses on dividend income Proper application of mind or not Held that:- Rule 8D of the I.T. Rules 1962 is applicable in the assessment year under consideration relying upon Maxopp Investment Ltd. VS. CIT [2011 (11) TMI 267 - Delhi High Court] - during the year the assesse had disposed some investments - The company had also taken loans from bank and other to the extent of ₹ 22,65,18,740 - The assessee however could not demonstrate by way of any evidence that none of the loan funds have been used for making investments - the AO has rightly come to the conclusion that the carrying cost of investments in terms of interest paid on loan funds to the extent of investments cannot be denied - Thus by invoking the provisions of section 14A of the Act the expenditure to disallow in the manner provided under Rule 8 D of the I.T. Act 1962 is rightly computed thus, the order of the CIT(A) is upheld Decided against assessee.
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