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2016 (5) TMI 1528 - AT - Income TaxDisallowance u/s 14A read with Rule 8D - Whether assessee has demonstrated that the investments were made from and out of the surplus funds? - HELD THAT:- Rule 8D(2) provides for computation of expenditure by all the three limbs provided therein on aggregate basis. Since the CIT(Appeals) has not considered the available funds with the assessee and source thereof, this Tribunal is of the considered opinion that the Assessing Officer shall reconsider the issue afresh and find out whether the assessee had any surplus funds as observed by the CIT(Appeals). If surplus funds were available, the Assessing Officer has to consider such surplus funds for making the investments. Since the order of CIT(Appeals) is not clear regarding the availability of surplus funds and source thereof, this Tribunal is of the considered opinion that the matter needs to be reconsidered by the Assessing Officer. Accordingly, the orders of the lower authorities are set aside and the entire issue is remitted back to the file of the Assessing Officer. AO shall reconsider the issue afresh and find out the availability of surplus funds and source thereof and thereafter decide the issue in accordance with law, after giving reasonable opportunity to the assessee. Disallowance of contribution made to ESI and Provident Fund. - Addition u/s 2(24)(x) and Section 36(1)(va) - HELD THAT:- It is not in dispute that the employees’ as well as the employer’s contribution to Provident Fund and ESI was deposited before the due date for filing of return of income. The Madras High Court in Industrial Security & Intelligence India Private Limited [2015 (7) TMI 1063 - MADRAS HIGH COURT] after considering the judgment of Apex Court in Alom Extrusions Limited [2009 (11) TMI 27 - SUPREME COURT] found that even though the employees’ contribution towards Provident Fund and ESI was deposited after the due date prescribed under the relevant Act but before the due date for filing of return of income under the Income-tax Act, no disallowance can be made under Section 43B of the Act. In view of this judgment of Madras High Court in Industrial Security & Intelligence India Private Limited (supra), this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
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