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2016 (8) TMI 602 - AT - Income TaxAddition made for depositing the employees contribution to PF and ESI beyond the prescribed time limit - Held that:- It is undisputed fact that the assessee had paid both the amounts before due date of return. The Hon’ble Jurisdictional High Court decision in the case of CIT Vs SBBJ (2014 (5) TMI 222 - RAJASTHAN HIGH COURT ) is squarely applicable, therefore, we uphold the order of the ld. CIT(A) in deleting the addition. - Decided against revenue. Disallowance U/s 14A of the Act read with Rule 8D - Held that:- It is undisputed fact that the investments in shares were made up to F.Y. 2005-06. During the year, no investment has been made by the assessee. The assessee had share capital of ₹ 3.14 crores and reserve and surplus of ₹ 4.57 crores. It is further found that investments made in subsidiary company not in the share of any other unrelated party. Therefore, the primary object of the investment was holding and controlling stake in the group concern and not earning any income out of investment. The ld Assessing Officer had not established any nexus between borrowed fund with investments made in shares on which dividend earned. The case laws relied by the ld. AR are squarely applicable, therefore, we uphold the order of the ld CIT(A)in deleting the addition. - Decided against revenue. Addition made on account of foreign exchange gain - Held that:- It is undisputed fact that the debtors was in dispute since F.Y. 2007-08 and 2008-09, there was a remark by the Auditor on account of foreign exchange gain in the audit report and clarified that amounting to ₹ 37,05,685/- had not been credited in the account of the assessee. The assessee has explained the reasons that it has not received this income. There is a dispute with the Brazilian party on account of quality of goods. The original bill amount was in dispute, therefore he has not shown this increase in foreign exchange gain. The interest income on sticky loans, which has calculated on the basis of hypothetical income not real income of the finance company. In this case also, the ld Assessing Officer has calculated this foreign exchange gain on notional basis, which was not real. The other case laws referred by the assessee are also squarely applicable on real income theory. Accordingly, we uphold the order of the ld CIT(A) in deleting the addition. - Decided against revenue. Addition U/s 43B - advance payment of VAT - Held that:- There is no dispute about the fact of the amount payments made and deduction claimed in computation of income at the time of filing of return but it is also undisputed fact that this is advance payment of VAT. Statutory liability is to be allowed on payment basis. The liability for which was incurred in the previous year will be allowed as deduction and the liability should be related to previous year. Wherein sales tax liability of last quarter could not be paid before closing date of the every year, therefore, this incentive was given U/s 43B of the Act by the Legislature. This issue has been considered by the Coordinate Bench of Hyderabad in the case of DCIT Vs CWC Wines Pvt. Ltd. (2003 (11) TMI 302 - ITAT HYDERABAD-A ) and held that advance payment is not deductible. Section 43 may not be understood as authorizing payment which have not become due but all the sum paid in advance. Therefore, we are of the considered view that the ld CIT(A) had rightly disallowed the deduction claimed U/s 43B of the Act for advance payment of VAT - Decided against assessee
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