TMI Blog2012 (8) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... MBAY ) - Decided in favor of assessee. Employees’ contribution to PF and ESIC - dis-allowance - belated payment - Held that:- If the employee’s share of contribution is paid before the due date of filing of the return u/s 139(1), then no dis-allowance can be made. See CIT V/s Alom Extrusions Ltd (2009 (11) TMI 27 - SUPREME COURT) - Decided in favor of assessee. Dis-allowance u/s 40(a)(ia) - belated payment of TDS - Held that:- Amendment made u/s 40(a)(ia) requires to be treated with retrospective operation. Hence, since TDS has been deposited before the due date of filing of the return of income u/s 139(1), therefore, we delete the addition made u/s 40(a)(ia) - Decided in favor of assessee. - ITA No. 6414 & 5940/MUM/2010 - - - Dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra). 2. The Ld. CIT(A) while making the above observation has erred in law in not appreciating the fact that to claim deduction in terms of section 36 of the Act, the burden to establish that the borrowed funds were utilised exclusively for the purpose of business was on the assessee and since the assessee did not file any such proof before the Assessing Officer, it was not entitled to claim the deduction. 3. The appellant prays that the order of Ld. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. 6. Brief facts of the above issue are that during the course of assessment it was inter alia observed by the A.O. that the assessee had a borrowing of Rs. 51.10 crores and made payment of Rs. 4.15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing at page 22 and 25 of the assessee s paper book, therefore, the interest free advances were not given by the assessee out of own funds and hence the disallowance made by the A.O. be restored. 9. On the other hand, the ld. Counsel for the assessee submits that there is no dispute that interest free advances were made out of mixed funds consisting of borrowed and own funds vide findings recorded in para 4.2 of the assessment order. He further submits that when mixed pool of funds is utilised and no specific borrowed funds are used for investment and sufficient non-interest bearing funds are available, presumption is that investment is made out of own non-interest bearing funds and for this proposition, the reliance was also placed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is established considering the finding of fact both by the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal. 12. In absence of any contrary material placed on record by the Revenue, we respectfully following the decision of the Hon ble jurisdictional High Court in Reliance Utilities and Power Ltd. (supra) while rejecting the plea of the ld. D.R. hold that the disallowance made by the A.O. is not sustainable in law. The grounds taken by the Revenue are therefore rejected. ITA 6414/Mum/2010 (Assessee s appeal) 13. Ground No. 1 is against the findings of the ld. CIT(A) that the rate of 8% applied by the A.O. while disallowing the interest is not excessive. 14. After hearing the rival submissions, we are o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rival parties and perusing the material available on record we find that the facts are not in dispute inasmuch as it is also not in dispute that the assessee has deposited the amount of PF and ESIC Rs.8,48,490/- before the due date of filing of the return u/s 139(1) of the Act. This being so and keeping in view the decision of the Hon ble Supreme Court in CIT V/s Alom Extrusions Ltd. (2009) 319 ITR 306 (SC) and the decision of the Hon ble Delhi High Court in CIT V/s AIMIL Ltd. (2010) 321 ITR 508 (Del) wherein it has been held that if the employee s share of contribution is paid before the due date of filing of the return u/s 139(1), then no disallowance can be made. Respectfully following the above decisions and the consistent view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he capital expenditure is not tenable. However, he directed the A.O. to allow the amount as deduction in the next assessment year on payment basis. 22. At the time of hearing, the ld. Counsel for the assessee submits that since the payment of TDS was made before the due date of the filing of the return u/s 139(1) of the Act, therefore, according to the provisions of section 40(a)(ia), no such disallowance is called for and in support he also placed on record a copy of the Challan dtd. 12-9-2005 for the payment of TDS Rs. 433905/- on the payment of Rs. 2,07,51,098/- appearing at page 54 of the assessee s paper book. He, therefore, submits that the disallowance made by the A.O. and sustained by the ld. CIT(A) be deleted. 23. On the other ..... X X X X Extracts X X X X X X X X Extracts X X X X
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