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2019 (7) TMI 360 - AT - Income TaxDisallowance of ESIC and EPF u/s 37(1) - allowable business expenses - assessee was not under obligation to discharge the liability under EPF and ESIC in respect of employees of sub-contractors - HELD THAT:- In the instant case though the assessee was not under contractual obligation but the assessee was severally liable for the compliances of the provisions of Employees Provident Fund and Miscellaneous Provisions Act, 1952 and the scheme framed under the said Act. Further, the assessee as part of good corporate governance complied with the provisions of beneficial legislature qua the contract labourers who were working for the assessee. The rendering of service and payments have not been doubted by the Department. The payments were wholly and exclusively for the purpose of business of assessee - assessee’s claim of such payments u/s. 37(1) of the Act deserves to be allowed. - Decided in favour of assessee Disallowance of expenditure u/s. 14A r.w. Rule 8D(iii) - CIT-A deleted disallowance in respect of interest expenditure, i.e. disallowance made under Rule 8D(ii) and sustained statutory disallowance of 0.5% of the average value of investments under Clause (iii) of Rule 8D - HELD THAT:- We observe that the findings of Commissioner of Income Tax (Appeals) on this issue are fair and reasonable, hence, we do not find any reason to interfere with the same. - Decided against assessee
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