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2020 (4) TMI 253 - AT - Income TaxDelayed payment of employees contribution to Provident Fund - addition u/s 2[24][x] r.w.s. 36[1][va] - payment made before the due date for filing the return of income by the appellant - HELD THAT:- Assessee has made deposits within the financial year but the fact remains that this ground of appeal was not raised before the CIT (Appeals). Accordingly, we restore this ground of appeal to the file of CIT (Appeals) to adjudicate on merits and allow allow additional ground of appeal for statistical purposes. Whereas in respect of claim of additional depreciation, the learned Authorised Representative submitted that the assessee has evidences and proof that the computer is an essential part of plant and machinery installed at the factory premises. We found the assessee has not produced any evidence in the appellate proceedings. Hence we consider it proper to remit the disputed issue to the file of CIT (Appeals) for adjudication considering the evidences filed by the assessee. Disallowance u/s 14A r.w. Rule 8D(2) - restricting the disallowance of expenditure to the extent of dividend income - HELD THAT:- We found the assessee has surplus funds and relied on the decision of CIT Vs. Microlabs Limited [2016 (4) TMI 219 - KARNATAKA HIGH COURT]held that when investments are made out of common pool of funds and non-interest bearing funds were more than the investments in tax-free securities, no disallowance of interest expenditure under section 14A can be made. Thus we restrict the addition to the extent of ₹ 38,857. Disallowance under Section 40(a)(ia) with respect to interest paid to Tata Capital Ltd. - Non deduction of TDS - AR submitted that the recipient has offered income in their assessment, therefore, there is no requirement to make addition - HELD THAT:- When a query was raised to the learned Authorised Representative regarding obtaining of Certificate from Auditor in Form 26A that the recipient has offered the income in their Assessment. The learned Authorised Representative submitted that the information is available with the assessee and prayed for an opportunity to substantiate before lower authorities. Accordingly to meet the ends of justice, we restore this issue to the file of CIT(Appeals) to consider the submissions of the assessee duly support with evidence of Form 26A and adjudicate on merits. Disallowance of interest on advances provided to the sister concern - AO has disallowed interest @ 12% p.a. - HELD THAT:- We found from the financial statements the assessee has sufficient own funds in comparison to the advances provided to the sister concerns, further out of surplus funds of ₹ 5,78,67,588 as on 31.03.2013, the advances to sister concerns are to the extent of ₹ 39.91 lakhs and investments of ₹ 77.74 lakhs and both aggregating to ₹ 117.65 lakhs which is comparatively lower than surplus funds as on 31.3.2013. Hence the presumption would arise that the advances to sister concern and investments are out of interest free funds/surplus funds. We support our view relying on the decision of Hon'ble Bombay High Court in the decision of CIT Vs. Reliance Utilities and Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT]. We respectfully follow the ratio of judicial decision and the presumption that advances to sister concerns are out of interest free funds and accordingly direct the Assessing Officer to delete the interest disallowance.
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