TaxTMI 
TaxTMI 
2004 (9) TMI 563
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....inter connected, they are disposed of together. 3. Facts of the case briefly, are that the assessee company is a Public Limited Company incorporated on 14-12-1962. It is engaged in the business of manufacturing and trading of Borosilicate Glass, a glass with low expansion capacity. The manufacturing units are at Marol-Maroshi Road, Mumbai and the other at MM Nagar, Chennai, Tamil Nadu. The assessee company had taken plant and machinery on lease from M/s. Sundaram Finance Ltd. (SFL), M/s. Tata Finance Ltd. (TFL) & M/s. IDBI. This plant and machinery was sub-leased to its subsidiary company M/s. Gujarat Borosil Ltd. (GBL) vide agreement and arrangement in the assessment year 1994-95. The Assessing Officer noticed that the assessee paid lease rent of Rs. 2,56,47,446 for assessment year 1998-99 and Rs. 2,19,34,664 for assessment year 1999-2000, whereas it received only Rs. 97,00,000 in both the assessment years from its subsidiary company as lease rent. The assessee was asked to explain as to why the company has charged only Rs. 97,00,000 in each assessment year from the subsidiary company as the lease rent on the same plant and machinery which was taken on lease at a lease rent of Rs....
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....f total GBL share. Therefore, it is in our interest to revive GBL in such a way that future losses/liabilities may be reduced and GBL starts making profits. After consideration of all above facts and circumstances as well as our discussions with various Financial Institutions, it was decided to workout the payment of lease rent and recovery of lease rent from GBL. The working for the same was made in such a way that there should not be any loss to us which can be seen from the enclosed comparative statement of Lease Rent Paid and received from 1993-94 onwards. Your goodself will kindly appreciate that the total lease rent payable over 7 years period is Rs. 1299.72 lacs while the total recovery is to be made over a period of 14 years is Rs. 1367.50 lacs. Thus, over all there will be more recovery of Rs. 67.78 lacs and there is no loss on account of lease rent paid by our company." In another letter dated 8-12-2000, the assessee submitted that the total recovery to be made over the period of 15 years was Rs. 1367.50 lacs and furnished the following comparative statement of lease rent paid and recovered from assessment year 1994-95 onwards: Accounting Amount paid as Lease Amount ....
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....s Works Ltd. (Returned Income as per normal provisions of computation) Gujarat Borosil Ltd. (Loss as per books) (Rs. in lakhs) A.Y. Income Returned of the year Difference in lease rent Total income Loss as per books Difference in lease rent Total 94-95 155.72 24.88 24.88 95-96 56.05 146.72 202.77 (-) 627.77 146.72 (-) 774.49 96-97 38.8 161.03 122.23 (-) 402.22 161.03 (-) 563.23 97-98 (-) 158.33 161.03 2.7 (-) 795.19 161.03 (-) 956.22 98-99 19.05 159.47 178.52 (-) 2120.10 159.47 (-) 2279.57 99-00 4.96 122.34 127.3 (-) 1020.68 122.34 (-) 1143.02 The Assessing Officer pointed out that had the total lease rent paid by the assessee company been received from the subsidiary company, the subsidiary would have been still showing losses but the assessee company would have to pay higher taxes. Thus, the motive and the objective of the assessee behind charging of lower lease rent from the subsidiary company was only to evade taxes by making unreasonable, excessive and inflated claim of expenses. Thus, he held that there is no justification for charging the subsidiary company lower rate of lease rent than what has been paid by the asses....
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....years whereas, the assessee company had sub-leased the same to the subsidiary company for a period of fourteen years. This shows that the lease agreement with the subsidiary for the extended period of fourteen years is not a normal commercial transaction rather extra commercial transaction for the purpose of claiming higher expenses in the hands of the assessee and thereby to evade tax. He further mentioned that the quantification of benefit (if any) cannot be done in absolute terms but on the basis of the Net Present Value (NPV) of the lease rent paid and lease rent received. As per the NPV method the assessee would end up paying far more lease rent than what it would receive from the subsidiary company. In this connection, reliance was placed on the decision of Hon'ble Bombay High Court in the case of Ciba Dyes Ltd. v. CIT [1954] 25 ITR 102 stating that the expenditure incurred is not directly connected with the business of the assessee company. Reliance was also placed on the decision of Hon'ble Madras High Court in the case of CIT v. Amalgamations (P.) Ltd. [1977] 108 ITR 895 which was affirmed by Hon'ble Supreme Court reported in CIT v. Amalgamation (P.) Ltd. [1997] 226 ITR 18....
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....erefore, disallowed these amounts also. The CIT(A) having concurred with the Assessing Officer, the assessee is in second appeal before the Tribunal. 7. The learned assessee counsel submitted that the assessee company promoted GBL and the said company was initially incorporated as Gujarat Window Glass Ltd., with the objective to manufacture sheet glass and allied products. Later, its name was changed to Gujarat Borosil Ltd. The project cost was originally estimated at Rs. 4575 lacs in 1989 which was revised to Rs. 6,487 lacs in December, 1991. The finance institutions insisted on a corporate guarantee by the promoters of the assessee company along with an undertaking from the promoters that any further cost over run would have to be financed by the promoters. In order to implement this project, the company decided to raise funds by way of Public Issue. The commercial production was to start in April, 1993 but due to riots taking place in the month of January, 1993 consequent upon demolition of Babri-Masjid, the work was stopped and delayed since all the necessary equipments and imported machinery could not reach the factory site in time at Bharuch town, where the factory is situa....
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....ccount of Babri Masjid demolition resulting in delay of equipments to be delivered. These factors resulted in increase in project cost. He further pointed out that if the assessee company did not agree to help GBL the project would have been abandoned as GBL was not in a position to meet such huge liability. Since GBL did not have liquid funds to further invest, it was decided by the assessee to borrow them by way of equipment lease and sub-lease the same to GBL. 8. The Revenue authorities have stated that the lease rent paid was more than what was received by the assessee company. Therefore, the difference of lease rent paid should be disallowed ignoring the fact that during the assessment years 2001-2002 to 2008-2009 the assessee company will be paying taxes on full recovery of Rs. 97,00,000 per year, whereas there will not be any expenses claimed on this account. The learned counsel further contended that in totality the company is receiving more than what it is paying out. The only difference was the time span. If the subsidiary did not survive the corporate guarantee would be enforced which the assessee would not be able to pay as its business would be ruined. The case of the....
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....ecting to get profit immediately and instantly. A businessman works in his own prudence. Sometimes the transactions are entered with an eye on a stream of profits and the instant transaction is one of that kind. The observation of the Assessing Officer at para 5.10 that the net present value of the payments would exceed the net present value of the receipts, imports a concept which is alien to Income-tax Act. In the context of deductibility of expenditure it is submitted that NPV has no role to play in the deductibility of expenditure. Wherever, the Income-tax seeks to bring into play the concept of net present value a specific provisions has been incorporated into the Act. Here the learned counsel invited our attention to section 269UA(b)(1)( iii). Thus, the net present value as a concept is not unknown to the legislature in the context of Income-tax Act. However, for good reason the Income-tax Act does not take into account the net present value either in determination of income or in determination of expenditure. The basic underlying basis on which the Income-tax Act is based is that accounts are prepared on a historical basis, that is, sums are entered as received or accrued or....
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....see, there appears to be no good reason for denying the benefit of section 10(2)(xv) of the Act to the company if there is no other impediment to do so." Applying these principles the Supreme Court concluded at pages 275 and 276 that if the company felt that there was a method which would inure to its benefit, it cannot be said that the payment of compensation was made with an oblique motive and without regard to commercial considerations or expediency. Thus, it was submitted that that it is clear that deductibility of expenditure under section 37(1) must not be examined on the touchstone of necessity compelling or otherwise. The litmus test is not necessity but whether the amount can be said to have been laid out or expended wholly or exclusively for the purpose of business of the assessee whatever be the motive moving that expenditure. Reference was again made to the decision of Sassoon J. David & Co. (P.) Ltd.'s case (supra). It was submitted that the Hon'ble Bombay High Court in the case of Phaltan Sugar Works Ltd. (supra) had disallowed interest paid on loans borrowed for advancing to its subsidiary company. It was pointed out that a perusal of that judgment would indicate at....
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.... Finance Ltd., Sundaram Finance Ltd. and IDBI are related parties and therefore, the question of applicability of section 40(A)(2)(b) of the Act does not arise. 9. The learned Departmental Representative basically relied on the opinion given by the Assessing Officer in paragraphs 3.3 to 5.3 of the assessment order and pointed out that the assessee was trying to reduce the tax burden by way of the lease transaction. It is further submitted that the principle of res judicata must apply and as during year there was no surplus between the lease rent received and lease rent paid the same should be disallowed. In this connection, reliance was placed on the decision of Hon'ble Supreme Court in the case of M.M. Ipoh v. CIT [1968] 67 ITR 106. Further reliance was also placed on the decision cited at S.A. Ranganathan v. CED [1963] 49 ITR (E.D.) 137 (Mad.) and H. Holck Larsen v. CIT [1972] 85 ITR 285 (Bom.). The learned Departmental Representative further submitted that the concept of discounting is not violative of the Constitution of India. Therefore, he emphasized that the NPV of the lease rent paid and lease rent received showed that the assessee would end up paying a far more lease rent....
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....st owing to these factors. The assessee had given counter guarantees to financial institutions which were in force in respect of the investments made in the subsidiary company. The Assessing Officer has pointed out that the assessee paid lease rent of Rs. 2,56,47,446 for assessment year 1998-99 and Rs. 2,19,34,664 for assessment year 1999-2000, whereas it received only Rs. 97,00,000 in both the assessment years from its subsidiary company as lease rent without realizing that the transaction entailed a revenue generation for a period of fifteen years and outlay of seven years. The total revenue generated on account of the transaction was Rs. 13,67,50,000 and the total out going was Rs. 12,84,16,868. Therefore, the Assessing Officer was not right in concluding that there was a loss in the transaction. Undoubtedly, in the year under consideration the lease rent paid is in excess of the lease rent received by the assessee. But in our mind there is no law that requires an assessee to enter into a transaction expecting to get profit immediately and instantly. It is the prudence of the businessman which we have to rely upon. Often a businessman enters into a transaction with an eye on a s....
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....ffered to tax the whole price of Rs. 43,692 although it had actually received only Rs. 29,392 and the balance amount of Rs. 14,300 was to be received in the future. Conversely as the assessee has undertaken to develop the plots of land it had provided for expenditure of Rs. 24,809 which again was to be expended in the future. The Assessing Officer disallowed the entire expenditure holding that the expenditure was to be incurred in the future and it had not actually been disbursed. The Supreme Court held that the expenditure was allowable in full and the income was accordingly determined. From this decision it is clear that neither in respect of income to be received in future nor in respect of expenditure to be incurred in future was any net present value taken by the assessee or by the Assessing Officer or by the Supreme Court. Therefore, the Income-tax Act does not concern itself with the net present value in the context of determination of income. The decision in the case of J.R. Patel & Sons (P.) Ltd. (supra) which was subsequently followed by the Hon'ble Gujarat High Court in the case of Raipur Mfg. Co. Ltd. (supra) has held as under: "As has been observed in J.R. Patel and S....
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.... or improper motive for some considerations aliunde the business or out of generosity, then the payment is not liable to be regarded as one covered by the provisions of section 10(2)(xv): that the matter has to be viewed in the light of principles of commercial trading and commercial expediency and what is required is that the expenditure must be germane to the business of the assessee and not something which is de hors the business." Therefore, the concept of net present value cannot be imported in context of the present case. The contention of the Assessing Officer that the entire motive was to benefit the subsidiary company is not correct. Even assuming for the sake of argument without admitting that such was the motive we cannot ignore that in the bargain the assessee was benefited to the extent of Rs. 83.33 lacs in the entire period. 12. Secondly, the learned Assessing Officer was of the opinion that the expenses incurred were not "wholly" and "exclusively" for the business of the assessee. The learned Assessing Officer failed to appreciate the distinction between "wholly", "exclusively" and "necessarily". This distinction has been explained by the Hon'ble Supreme Court in S....
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....rposes of the company. It has to be observed here that expression "wholly and exclusively" used in section 10(2)(xv) of the Act does not mean "necessarily". Ordinarily, it is for the assessee to decide whether any expenditure should be incurred in the course of his or its business. Such expenditure may be incurred voluntarily and without any necessity and if it is incurred for promoting the business and to earn profits, the assessee can claim deduction under section 10(2)(xv) of the Act even though there was no compelling necessity to incur such expenditure. It is relevant to refer at this stage to the legislative history of section 37 of the I.T. Act, 1961, which corresponds to section 10(2)(xv) of the Act. An attempt was made in the I.T. Bill of 1961 to lay down the "necessity" of the expenditure as a condition for claiming deduction under section 37. Section 37(1) in the Bill read "any expenditure....laid out or expended wholly, necessarily and exclusively for the purposes of the business or profession shall be allowed....." The introduction of the word "necessarily" in the above section resulted in public protest. Consequently, when section 37 was finally enacted into law, the ....
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....he case of Rajaram Bandekar (supra) wherein it has been held as under: "The Supreme Court in the case of CIT v. Delhi Safe Deposit Co. Ltd. [1982] 133 ITR 756 has considered when expenditure can be considered as laid out on purely business consideration and wholly for the purpose of assessee's business. The Supreme Court has observed that the true test of an expenditure laid out wholly and exclusively for the purposes of trade or business is that it is incurred by the assessee as incidental to his trade for the purpose of keeping the trade going and of making it pay and not in any other capacity that that of a trader. The Supreme Court has observed that the question should be decided on ordinary principles of commercial trading and commercial expediency. The mere fact that, to some extent, the expenditure may ensure to a third-party's benefit cannot, in law, defeat the effect of the finding as to the purpose of the expenditure. Such expenditure can have a wide ranging purpose. It may cover not only the day-to-day running of a business but also the rationalization of its administration and modernization of its machinery. It may include measures for the preservation of the business ....
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....ne year binding in another year. The assessment and the facts found are conclusive only in the year of assessment; the findings on questions of fact may be good and cogent evidence in subsequent years, when the same question falls to be determined in another year, but they are not binding and conclusive." The learned Departmental Representative contended that the principle of res adjudicata has no role to play in the present context, because the question before us is when a businessman enters into a transaction which may give him immediate loss but an overall profit cannot be challenged on the ground that he entered into a transaction which resulted in an immediate loss. Therefore, it is not as if a decision of an earlier year in the case of the assessee is being sought to be followed in the subsequent year nor is it that a decision in another case is sought to be followed in the case of the assessee. What the assessee is saying, is that when examining the transaction from the point of view of determining whether it is a commercial transaction, one must look at it holistically and not piecemeal. Another argument raised by the Departmental Representative relating to the concept of ....
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....ted." 4. Without prejudice to Ground No. 3 above, alternatively, it is prayed that the Modvat Credit on the beginning of the previous may please be added to the opening stock on the similar basis of adding Modvat Credit to the closing stock. The appellant prays that a suitable direction to add the Modvat Credit to Opening Stock may please be given in case Ground No. 3 is not allowed." The assessee-company has been regularly following the system of valuation of closing stock net of Modvat and the same was accepted by the department. According to the assessee the closing stock during the year under reference was valued as net of taxes and other levies such as octroi, sales tax set off etc. Thus, it is stated by the assessee that amount of Rs. 16,07,922 at the credit side of its Modvat account represented unutilized Modvat for assessment year 1997-98. The assessee relied on the decision of Hon'ble Bombay High Court in the case of CIT v. Indo Nippon Chemical Co. Ltd. [2000] 245 ITR 384 which is also confirmed by the Hon'ble Supreme Court in CIT v. Indo Nippon Chemicals Co. Ltd. [2003] 261 ITR 275 . 18. Before the CIT(A) it was pointed out that the Assessing Officer has wrongly ment....
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....The interpretation of the provisions of section 145A clearly shows that opening stock is not to be considered for the purpose of adjustments which are only to be made in purchases and sales of goods and inventory. Hence the Assessing Officer has rightly added the unutilized modvat credit in the closing stock as on 31-3-1999. Hence, the Assessing Officer's action is confirmed and this ground of appeal is rejected." Aggrieved, the assessee has raised the above grounds before the Tribunal. 19. During the course of hearing the ld. Counsel for the assessee submitted that his claim may be considered in the light of the decision of Hon'ble Supreme Court in the case of Indo Nippon Chemicals Co. Ltd. (supra) and the matter may be sent back to the Assessing Officer to examine the same. The learned Departmental Representative relied on the order of the learned CIT(A). 20. We have heard the parties and considered their rival submissions. We are of the opinion that this matter should go back to the file of the Assessing Officer to examine the issue afresh with reference to the decision of the Hon'ble Supreme Court in the case of Indo Nippon Chemicals Co. Ltd. (supra). These grounds are allow....
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....ing a loan is a capital expenditure. He has also indicated that the assessee in the grounds of appeal admitted that the loan was obtained for the expansion of the existing business. Therefore, the expenditure shall be treated as capital in nature. 22. The learned counsel submitted that the front-end-fee is like a processing charge in respect of grant of loan. In this connection, are our attention was invited to page 140 of the paper-book (Appendix I, Special Terms and Conditions). It is submitted that the principle reason given by the Assessing Officer is that the expenditure on account of front-end-fee is not allowable because the loan has been taken for long-term purposes and is therefore capital in nature. Further, the learned counsel invited our attention to the decision of Hon'ble Supreme Court in the case of India Cements Ltd. v. CIT [1966] 60 ITR 52, wherein it has been held as under: "To summarize this part of the case, we are of the opinion that : ( a) the loan obtained is not an asset or advantage of an enduring nature; (b) that the expenditure was made for securing the use of money for a certain period; and (c) that it is irrelevant to consider the object with which th....
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....order to determine whether the expenditure in the present case is capital or revenue, we would like to mention here the observation of the Hon'ble Supreme Court in the case of India Cements Ltd. ( supra): "In S.F. Engineer v. Commissioner of Income-tax, the Bombay High Court held that the expenditure incurred for raising loan for the carrying on of a business cannot in all cases be regarded as an expenditure of a capital nature. On the facts of the case, they held that as construction and sale of the building was the sole business of the firm and the building was its stock-in-trade, and the loan was raised and used wholly for the purpose of acquiring this stock-in-trade and not for obtaining any fixed assets or raising any initial capital or for expansion of the assessee's business, the expenditure incurred for the raising of loan was not an expenditure of capital nature but revenue expenditure. Although the conclusion of the High Court was correct, we are not able to agree with the principle that the nature of the expenditure incurred in raising a loan would depend upon the nature and purpose of the loan. A loan may be intended to be used for the purchase of raw material when it ....
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....pensation for loss of possible investment, the taxability of such fees will fall within the purview of article 22 of the Treaty. Article-22 Other income-1. Subject to the provisions of paragraph (2) of this article, items of income of a resident of a Contracting State, wherever arising, which are not expressly dealt with in the foregoing articles of this Convention, shall be taxable only in that Contracting State." On perusal of the question No. 11 along with Article 22, we find that the issue before the AAR did not concern itself as to whether front end fees were capital in nature or revenue in nature. Therefore, the observation made by the Assessing Officer is wholly misplaced. Respectfully, following the decision of Hon'ble Supreme Court in the case of India Cements Ltd. (supra), and applying the same to the facts of the present case we are of the opinion that the front-end-fees was like processing fees for signing a loan agreement. Therefore, it is revenue expenditure. We therefore, allow this ground of appeal also. 25. Ground No. 6 relates to the disallowance of the payment amounting to Rs. 26,81,000 made to Mahanagar Gas Limited as revenue expenditure. Ground No. 7 is the ....
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.... ITR 293 (Raj.). The CIT(A) confirmed the addition made by the Assessing Officer on this issue for the reasons given in his order at paragraphs 18 and 19. He has discussed various case laws relied on by the learned counsel, details of which are given at para 13 of the impugned order. The case of the assessee was that the expenses were claimed as revenue expenditure on the ground that the assessee was compelled to pay the amount of Rs. 26,81,000 for getting gas connection from MGL. The said expenditure was incurred to reduce the cost of fuel and increase the efficiency. The ownership and maintenance of pipeline etc. were with the MGL and the assessee was not entitled to get any refund on this account. Further, the expenses were necessary to obtain the supply of gas and, therefore, the said expenses were wholly and exclusively for the use of business purpose and thus, revenue in nature. The learned counsel invited our attention to clause 5 of the letter dated 5-12-1997 relating to the supply contracts and submitted two reasons for allowing the expenditure as revenue expenditure, which are as under : "1. Even though the expenditure has been incurred on construction of a pipeline sinc....
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....eliance on the decision of Hon'ble Bombay High Court in the case of National Machinery Manufacturers Ltd. (supra). 28. We have considered the rival submissions and have gone through the material available on record. In the case of National Machinery Manufacturers Ltd. (supra), the principle laid down by the Hon'ble Bombay High Court in Excel Industries Ltd.'s case (supra) has been reiterated. Question No. 1 in that reference was whether a sum of Rs. 4,50,000 paid by the assessee-company to MIDC for a temporary water supply connection was allowable expenditure having regard to the fact that the pipeline belonged to MIDC. The Bombay High Court held that it was an allowable revenue expenditure applying the principle laid down by Supreme Court in Lakshmiji Sugar Mills Co. (P.) Ltd. v. CIT [1971] 82 ITR 376 and Excel Industries Ltd.'s case (supra). It will be pertinent to mention here that in the case of Jaswant Trading Co. (supra), no material was placed to show that the water treatment plant belonged to RIICO and, therefore, the expenditure was disallowed as capital expenditure. In the present case also, even though the assessee had incurred the expenditure on construction of the pip....
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....perimental expenses incurred for the manufacture of new items are completely allowable for deduction in full in computing the income. However, it is only for the accounting purpose, the different heading was given and the expenses were taken under the head Deferred Revenue Expenses. It is submitted that all the expenses incurred under the above 3 heads have been capitalized for book entry purpose, but the same have been claimed as Revenue Expenses in the computation of income since the nature of expenses are of Revenue nature. In this connection, we submit that treatment of an expenditure by the assessee-company in the books of account is neither determinative or conclusive. But, it is to clarify that treatment of a particular expenditure in its books of account, though neither determinative of the nature of expenditure nor conclusive one way or other cannot be regarded as irrelevant. This conclusion is supported by the Bombay High Court decision in the case of CIT v. Sandoz India Ltd. [1994] 206 ITR 599 ." During the assessment proceedings, it was stated that the company wanted to diversify into the production of ampules and vials required by the pharmaceutical industry and ther....
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....the year under consideration, the assessee-company has made certain expenses for experiments and part of the normal expenses were allocated to new product expenses just to find out the amount of expenses required to be incurred for this type of experiments. If the experiments would not have been taken place, then most of the expenses which are in the nature of fixed expenses were required to be incurred whether furnace was run or not or whether experiments were undertaken or not. It was further submitted that during the period of experimentation, production continued and saleable glass was packed, the details of which have been submitted to the Assessing Officer. But he disallowed the expenditure without considering that the assessee had produced material income which had been included in the profit and loss account. The learned counsel further pointed out that a bare perusal of the details of the expenses given in its letter dated 19-3-2002 would indicate that the expenditure in question is a revenue expenditure. Mere fact that the expenditure which was otherwise revenue expenditure has been treated as deferred revenue expenditure in the books of the company cannot for that reason....
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....t and the difference in the exchange value could not be assessed to income-tax. The Division Bench of the Bombay High Court further observed that the matter of taxability could not be decided on the basis of the entries which the assessee might choose to make in his account, but had to be decided in accordance with the provisions of law. What would determine the taxability is not whether the assessee has shown a particular item as a profit or loss in the accounting year, but whether the said item could be regarded either as a profit or loss under the provisions of the Act." In view of the above decision, we are of the opinion that the expenditure is allowable as revenue expenditure and allow this ground in favour of the assessee. 34. In view of our decision on ground No. 8, the alternative plea taken by the assessee in ground No. 9 does not survive. 35. Ground No. 10 relates to the disallowance of Rs. 1,16,374 under section 43B of the Act. During the course of assessment proceedings from the details of employees and employer's contributions towards PF filed by the assessee, the Assessing Officer noticed that the following contributions were not paid on or before the due dates : ....
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....d. Actual disallowance must be of Rs. 1,00,849 and not Rs. 1,00,859. As regards the disallowance of P.F., being payment beyond due dates, it is held that the Assessing Officer has rightly made this disallowance as because the contributions for the month of February and for the month of March, 1999 have been made beyond the due dates as per the Provident Fund Act even after considering the grace period of 5 days. Therefore, this disallowance is confirmed. 30. In support of this disallowance, the decision of Hon. Andhra Pradesh High Court given in the case of Hitech (India) Pvt. Ltd. 227 ITR 446 has been cited by the Assessing Officer. As per this decision, the payments for Provident Fund are to be made within due dates prescribed in the Provident Fund Act after considering the five days grace period. Further the decision of ITAT, Mumbai Bench 'D', Mumbai given in ITA No. 2371/B/94 for assessment year 1990-91 in the case of DC Special Range 5, Bombay v. M/s. Navin Bharat Industries Ltd., Bombay on 5-3-2002 is relied. In this decision, the Hon. ITAT has referred to various ITAT's decisions given on this issue. Such decisions are as under : (i)CPEC Ltd. (ITA No. 2150/Mum./97 of ITAT,....
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.... on account of contribution to be made by the appellant to ESIC and, therefore, this additional payment has been raises to be paid by the appellant towards ESIC fund. Therefore, the Assessing Officer has rightly considered this amount as late payment towards ESIC contribution. Hence, this disallowance is confirmed. 32. The amount of Rs. 879 is also relating to ESIC being related to Madras Sales Office. It has also been paid late and no date of payment has been mentioned in the details filed at the time of hearing of this appeal also. Thus, this payment has rightly been disallowed by the Assessing Officer. Therefore, this ground of appeal is dismissed and the action of the Assessing Officer is confirmed." Aggrieved, the assessee is in appeal before the Tribunal. 37. During the course hearing before us the learned counsel for the assessee admitted that the late payment of employers contribution for which no date of payment has been mentioned at para 14.2 of the assessment order amounting to Rs. 15,515 cannot be allowed. However, the other payments for which the due date and date of payments have been mentioned is allowable as per the various decisions of the Tribunal and the decis....