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2022 (7) TMI 1133 - AT - Income TaxDifference in stock - Discrepancy in closing & opening stock - CIT-A deleted the addition - HELD THAT:- We do not find any infirmity in the order of the Ld.CIT(A) who has given a categorical finding of fact after due verification that there was no such discrepancy in the figures of stock of the preceding and impugned year in the audited financial statements of the assessee., that the discrepancy in the return filed therefore was a mere typographical error. The Revenue being unable to controvert the finding of the Ld.CIT(A) before us, we see no reason to interfere in the order of the Ld.CIT(A) deleting the addition made on account of alleged difference in stock. Late payment of employees contribution u/s 36(1)(va)/43B - HELD THAT:- We have no hesitation in upholding the order of the AO disallowing employees contribution to ESI deposited delayed, u/s 36(1)(va) of the Act, in view of the decision of the jurisdictional High Court in Gujarat State Transport [2014 (1) TMI 502 - GUJARAT HIGH COURT] categorically holding that the deposit of the same before the due date of filing of return of income will not suffice to escape from the provisions of section 36(1)(va) of the Act. Since it is a fact on record that the employees contribution was deposited delayed as per the applicable provisions of law, the issue stands covered against the assessee. The disallowance on account of delayed deposit of employee’s contribution to ESI is accordingly upheld. Disallowance u/s 14A - disallowance of expenses incurred for the purposes of earning incomes - CIT-A deleted the addition - HELD THAT:- We see no reason to interfere in the order of the Ld.CIT(A) who deleted the disallowance finding sufficient interest free funds available with the assessee for the purpose of making the investments. This fact has remained uncontroverted before us. It is a settled position of law that where sufficient own funds are available, the presumption is that the investments have been made out of the same calling for no disallowance of interest u/s 14A of the Act - we uphold the order of the Ld.CIT(A) deleting the disallowance made u/s 14A. Disallowance u/s 40(a)(ia) interest on late payment - non deduction of tax at source - said interest expenses pertained to that paid to the creditor of the assessee M/s Hero Moto Corp. Ltd for delay in payments against various purchases - CIT(A) deleted the disallowance finding that interest paid to creditors is not in the nature of interest as envisaged in the definition of interest u/s 2(28A) of the Act and hence the said interest was not covered u/s 40(a)(ia) - HELD THAT:- Before us Ld.DR was unable to controvert the finding of the LD.CIT(A) that interest paid to creditors on account of delayed payment did not qualify as interest as defined u/s 2(28A) - we see no reason to interfere in the order of the Ld.CIT(A) deleting the disallowance of interest. Disallowance u/s 40(a)(ia) freight expenses - Addition pertained to transportation/freight charges paid/credited by the assessee without deduction of tax at source - CIT(A) deleted the disallowance on finding that the transportation charges were included in the Bills of the Creditors/Suppliers and was therefore part of purchase cost paid to them and not in the nature of transportation expenses - HELD THAT:- DR was unable to controvert the factual contentions of the assessee and the factual findings of the Ld.CIT(A) that the freight payments were part of the bill of suppliers nor was he able to bring to our notice any decision of the jurisdictional High Court or the Hon’ble apex court holding to the contrary to what was held by the Hon’ble Punjab and Haryana High Court in the case of Bhagwati Steels [2010 (1) TMI 411 - PUNJAB & HARYANA HIGH COURT] - no reason to interfere in the order of the Ld.CIT(A) deleting the disallowance of freight expenses. Addition on account of travelling expenses - CIT-A held that the foreign traveling was not justified by the explanation and accordingly while he upheld the disallowance of foreign travelling expenses, the domestic travelling expenses were allowed - HELD THAT:- DR though relied on the order of the AO was unable to controvert the fact that the assessee had business transactions with the Hero Moto Corp Group ,nor was he able to point any infirmity in the findings of the Ld.CIT(A) that domestic travelling could not be ruled out completely in the aforestated backdrop of facts - we see no reason to interfere in the order of the Ld.CIT(A) deleting the disallowance. Addition on account of personal nature expenses out of car loan, interest , car depreciation, car insurance and car fuel expenses - AO disallowed 1/3rd of the total expenses incurred by the assessee on cars on various accounts attributing personal use to them noting that all of them were luxurious, expensive and the least fuel efficient cars, the assessee has used more than one car for business purpose during the year under consideration and the assessee did not furnish any log book relating the usage of above cars to distinguish business & personal uses - HELD THAT:- Both the AO and the Ld.CIT(A) have resorted to estimation for the purposes of disallowing car expenses on account of non-business user. We see no reason to interfere in the order of the Ld.CIT(A) whose disallowance of 20% of the fuel expenses we find is justified considering that there is no basis with the Revenue also for justifying disallowance of 1/3rd of entire car expenses which definitely is in our considered view on the higher side - we uphold the order of the Ld.CIT(A) deleting disallowance of car expenses.
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