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2018 (9) TMI 223 - HC - Income TaxDisallowance being the liabilities for business expenditure on the ground that they relate to earlier previous year - Held that:- Assessing officer had spoken about crystallising of expenditure during the year previous to the relevant previous year. This was on the basis of the accounting practice followed by the assessee. The factum of receipt of bills did not matter according to the tribunal. We are of the view that the tribunal had taken a plausible view. The issue involves more questions of fact and principles of accounting than law Addition u/s 14A - investment of the assessee’s surplus fund in securities, stocks, specified bonds etc - Held that:- It does not seem that the point the income from shares, securities etc., was business income was raised before the tribunal. At least, the order of the tribunal does not discuss this point at all. It has been raised before us. We can distinguish the two cases cited by stating that in those cases the shares, securities etc. were used for trading. They were used as trading assets. We reject the contention of the assessee. In this case, these shares, securities etc. on which dividend income was earned, were purchased compulsorily by the assessee in obedience to the direction of the Reserve Bank of India and were different from those which are bought and sold for the purpose of profit making. These assets of the assessee could not be considered as its trading assets. None the less investment in shares, securities etc. was so much an integrate part of the business of the assessee, that the business expenditure could not be segregated into parts representing expenses for earning dividend and other expenses. If for convenience and speedy disposal of cases one per cent of the expenses is deducted as attributable to earning exempted income it cannot be said that it is a bad practice. At times, even damages are computed on the basis of approximation and accepted by the Court. The calculation of the exact expenses incurred for earning dividend may not be theoretically possible. Therefore, computation on the basis of one per cent of the total business expenditure is reasonable in our view. This point fails. Provident fund contribution by assessee beyond the due date but before filing their return - Held that:- Under Section 43B any sum payable by the assessee as an employer by way of his contribution to any provident fund can be claimed as a deduction in the previous year in which the sum was actually paid by him by the first proviso. Time to make such payment is extended by the first proviso till the filing of the return of income tax under Section 139(1) of the said Act in respect of the previous year in which the liability to pay such sum was incurred. Hence, by using the expression liability incurred the legislature permitted the assessee to deposit the money with the return for the year in which the liability was incurred irrespective of the fact whether payment was made or not in that previous year. In Commissioner of Income-Tax, Circle –I, Kolkata Vs. Vijay Shree Ltd. [2011 (9) TMI 30 - CALCUTTA HIGH COURT]the Court has allowed the deduction on provident fund contribution made beyond the due date for its deposit but made before the due date for filing the assessee’s return for the previous year when the liability was incurred. Thus, the order of the tribunal relating to the above questions is erroneous and is set aside. The matter is remanded to the assessing officer to make a computation in terms of the observations made in this judgment and order and determine the income of the appellant for the assessment year 1999- 2000, within three months of this order
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