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2018 (7) TMI 1424 - AT - Income TaxAddition on account of expenses found to be unverifiable during the assessment proceeding - Held that:- AO has made an ad hoc disallowance @ 10% of the various expenses under the head under consideration which was restricted to 8% by the Ld. CIT(A), while considering the upholding of disallowance @ 8% for the Asst. Year: 2011-12, by his predecessor. Even Co-ordinate Bench at Amritsar for the Asst. Year: 2011-12 sustained the similar disallowances @ 8% as restricted by the Ld. CIT(A), which is not in dispute, hence, the ground No.1 stands dismissed. Addition on account of development of road by treating the same as capital expenditure - Held that:- The similar addition was also deleted by the Ld. CIT(A) for the Asst. Year: 2011-12 which was further sustained by the Co-ordinate Bench at Amritsar and therefore, the Ld. CIT(A) while relying upon the order passed by the predecessor for the Asst. Year: 2011-12 as well as while analyzing various case laws, deleted the addition under challenge treating the same as Revenue expenditure. Disallowance u/s 14A - addition in respect of investment of ₹ 3,55,00,000/- in shares holding on the reason that the same is not in a proximity to the business of the assessee company and used the business funds on dividends which is exempt income - Held that:- In the instant case, the assessee company had interest free funds of ₹ 52,84,12,357/- and out of which only ₹ 3,55,00,000/- has been invested in share of group companies which goes to show that the appellant has not invested interest bearing funds, hence on this reason alone, no disallowance can be made in view of the judgment rendered by Jurisdictional High Court in the case of CIT vs. Hero Cycles Limited [2009 (11) TMI 33 - PUNJAB AND HARYANA HIGH COURT ] Addition in terms of provision of Sec.36(1)(va) read with Sec.2(24)(x) - sum not been deposited within the due date as prescribed under the PF Act and the ESI Act - Held that:- Employees contribution towards PF paid by the assessee before due date on filing of return u/s 139(1) of the Act for the Asst. Year under consideration is admissible for deduction . Prior period expenses and on account of leave encashment to be allowed
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