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2020 (6) TMI 267 - ITAT KOLKATADisallowance being amortization of de-merger expenses claimed by the assessee u/s. 35DD - scheme of demerger approved by the Hon’ble Delhi High Court - HELD THAT:- the AO had considered the de-merger to be complete and effective, then he could not adopt a contrary stand in respect of corresponding expenses and deny the deduction claimed u/s 35DD of the Act alleging the demerger to be incomplete. It is further noted that the initial year of claim of deduction u/s 35DD of the Act was AY 2010-11. In the matter of, [2016 (9) TMI 1199 - SUPREME COURT] it was held that once the claim u/s 35D of the Act was accepted in the initial year i.e. AY 1995-96, then the clock had started running in favour of the assessee which was to continue for the entire period of ten years and the benefit once granted in the initial year could not be denied in the subsequent year. Disallowance u/s. 14A read with Rule 8D - suo moto disallowance - HELD THAT:- ClT(A) directed the AO to restrict the disallowance under Rule 8D(2)(iii) by considering only those investments which have yielded tax free income during the year. We find that this direction of the Ld. ClT(A) is in accordance with the decision rendered by this Tribunal in the case of REI Agro Ltd. Vs. DClT [2013 (9) TMI 156 - ITAT KOLKATA]which has since been upheld by the Hon'ble Calcutta High Court. Since the Ld. CIT(A) adjudicated the issue, as stated above, by following the decision the Tribunal, Kolkata Benches following the dictum of law laid in REI Agro Ltd. (supra), we do not see any reason to interfere with the order of the Ld. CIT(A) on this issue. Therefore, this ground of the Revenue is dismissed. Deduction u/s 43B - employees' contribution deposited by employer beyond the prescribed due date - HELD THAT:- We note that this issue is no longer res integra. We note that the Hon’ble Calcutta High court [2011 (9) TMI 30 - CALCUTTA HIGH COURT] has held that employees’ contribution to PF and ESI paid on or before the due date of filing of return of income u/s. 139(1) of the Act should be allowed as deduction.
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