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2016 (5) TMI 700 - AT - Income TaxDisallowance u/s 14A - Held that:- We have observed that Hon’ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT ) has held that Rule 8D of Income Tax Rules, 1962 is applicable only from the assessment year 2008-09 , while the relevant assessment year under appeal is 2006-07. Section u/s 14A of the Act is applicable for the relevant assessment year and the disallowance has to be made in respect of the income which does not from part of the total income . The assessee company has mixed pool of funds which are deployed for earning the taxable income and tax free income and it is for the assessee company to show with the cogent material/evidences that interest free funds are deployed in making investments which yield tax free income . In our considered view , the interest of justice will be best served if the matter is restored to the file of the AO for de-novo determination of the issue with the directions to the assessee company to produce on record cogent material/evidences to substantiate its claim that the interest free own funds are deployed for making the investments which yield tax free income and then accordingly the disallowance be worked out . The AO shall also keep in view the presumption as laid down by Hon’ble Bombay High Court in the case of HDFC Bank Limited (2014 (8) TMI 119 - BOMBAY HIGH COURT ) and also other case laws relied upon by the assessee company while de-novo determination of the issue. Needless to say that the AO shall grant proper and adequate opportunity of hearing to the assessee company in accordance with law in compliance with principles of natural justice. We order accordingly. Delayed payments in respect of Employees’ Contribution towards PF and ESIC - Held that:- We have observed that the assessee company has made payments towards Employee’s PF contribution beyond the time stipulated i.e. due date under the relevant PF Act but however the assessee company has made the afore-stated payments of PF before the due date of filing of return of income u/s 139(1) of the Act. We have observed that this issue is squarely covered by the decision of Hon’ble Bombay High Court in Ghatge Patil Transport Ltd [2014 (10) TMI 402 - BOMBAY HIGH COURT] and also Hon’ble Supreme Court in Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] in favour of the assessee company and hence the deduction is allowable with the respect to employee contribution towards PF if payment although made beyond the due date as prescribed under the PF Act but are made before the due date of filing of return of income u/s 139(1) of the Act which shall be treated as in compliance with Section 36(1)(va) of the Act read with Section 43B of the Act. - Decided in favour of assessee.
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