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2021 (8) TMI 770 - AT - Income TaxDisallowance u/s. 14A - no reason has been furnished for non-allocation of common management expenses, therefore, the Assessing Officer has determined the amount of expenditure in accordance in the provision of section 14A(2) r.w.r. 8D - HELD THAT:- Respectfully following the decision of the Co-ordinate Bench of the ITAT, we restrict the disallowance on account of administrative expenditure incurred towards earning exempt income to the extent of ₹ 14 lacs as against of disallowance of ₹ 46,54,415/- determined by the Assessing Officer after applying the finding of the ITAT decision as cited above wherein comparatively such disallowance was restricted to ₹ 7 lacs considering the disallowance amount of ₹ 20,57,946/- computed by the Assessing Officer on similar facts and circumstances in assessment year 2010-11 by the Assessing Officer. The Assessing Officer is directed to allow deduction of suo-moto disallowance already made by the assessee. Therefore, this ground of appeal of the assessee is partly allowed. Allocation of expenses between the eligible and non-eligible units in view of deduction claimed under the provision of section 80IC - on the basis of allocation of rate of 58.69%, the Assessing Officer has computed an amount of ₹ 27,89,536/- being 58.69% of the financial expenses to 80IC unit - HELD THAT:- During the course appellate proceedings the ld. counsel has neither disproved the findings of the lower authorities nor brought any material on record in contrary to the finding of the lower authority. Therefore, we do not find merit in this ground of appeal of the assessee and the same is dismissed. Disallowance u/s. 36(1)(va) - assessee has not deposited the employee’s contribution to ESIC in the employee’s account in the relevant fund on or before the due date - HELD THAT:- We consider that the Hon’ble Jurisdictional High Court in the case of CIT vs. Gujarat State Road Transport Corporation [2014 (1) TMI 502 - GUJARAT HIGH COURT] has held that when the employer has not credited the sum received by it as employees contribution to employees account in relevant fund on or before the due date as prescribed in explanation to section 36(i)(va) the assessee shall not be entitled to deduction. In view of the above, facts and judicial findings, we uphold the decision of ld. CIT(A). Disallowance u/s 14A - assessee has suo moto made the addition - HELD THAT:- The assessee has furnished tax audit report and relevant annexure of account indicating that investment was made in tax free bonds in earlier years and claimed it has not made any new investment during the year - we are of the view that disallowance of administrative expenditure incurred towards earning exempt income to the extent of ₹ 15 lacs is appropriate as against disallowance of ₹ 56,04,892/- determined by the Assessing Officer after applying the findings of Assessing Officer elaborated on similar issue at para 7 of this order. The Assessing Officer is directed to allow deduction of suo-moto disallowance already made by the assessee. Disallowance u/s. 14A in the book profit while computing book profit - HELD THAT:- The Special Bench of the Delhi ITAT in the case of ACIT vs. Vireet Investment Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] has held that expenses incurred to earn exempt income not to be added for computing book profit u/s. 115JB of the Act. Therefore, we allow these additional grounds of appeals of the assessee.
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