TMI Blog2015 (6) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... T Vs. Nipso Polyfabriks Ltd. (2012 (11) TMI 592 - HIMACHAL PRADESH HIGH COURT) we hold that employees contribution to PF & ESI remitted before the due date of filing of return u/s 139(1), will be allowable as deduction - Decided in favour of assesse. - ITA No. 1143/H/13, 144/H/13, 61/H/14, 120/H/13, 121/H/13 2009, 18/H/14 2010 - - - Dated:- 8-5-2015 - Shri P. M. Jagtap And Shri Saktijit Dey,JJ. For the Petitioner : Shri V. Siva Kumar For the Respondent : Shri Ramakrishna Bandi ORDER Per Bench: These cross appeals by assessee and the department are directed against separate orders of ld. CIT(A)-IV, Hyderabad for AYs 2008-09, 2009-10 and 2010-11. As issues raised in these appeals are more or less common and facts are identical, they have been clubbed and heard together, therefore, the same are disposed of by way of this common order for the sake of convenience. 2. The only issue raised by assessee in its appeals which also corresponds to the common issue raised in the departmental appeals relate to disallowance of expenditure u/s 14A of the Act. 3. Briefly the facts, as taken from the appeal folder relating to AY 2008-09 are, assessee a compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR arguing on the issue raised in additional ground submitted before us, in none of the assessment years under consideration assessee has earned/claimed any exempt income, hence, the provisions of section 14A of the Act will not apply. In support of such contention, assessee relied upon a decision of the Hon ble Gujarat High court in case of CIT Vs. Corrtech Engergy Pvt. Ltd., 45 Taxman.com 116 (Guj) and a decision of the ITAT Bangalore C Bench in case of Quality Engineering and Software Technologies Pvt Ltd. Vs. DCIT, 52 Taxman.com 515. 7. Ld. DR, on the other hand, submitted before us, ld. CIT(A) was not correct in restricting the disallowance u/s 14A to an amount of ₹ 3.84 crores claimed to have been made out of interest bearing funds. Ld. DR referring to the provisions of section 14A of the Act submitted before us, language employed in the said provision neither gives an impression that the said provision will not apply if no exempt income is earned during the year nor there is any restriction in the said section to indicate that it will apply only to investment made out of interest bearing funds. In support of his contention, ld. DR relied upon a decision of the ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able. Respectfully following the above decisions (cited supra), we also hold that the disallowance of expenditure u/s 14A of the Act is not tenable and therefore delete the disallowance of ₹ 7,34,975 made by the AO. 10. Though ld. DR has relied upon a decision of Mumbai Special Bench in case of Cheminvest Ltd. (supra), but, as held by ITAT Bangalore Bench in the decision referred to above, the Special Bench decision of Mumbai Tribunal cannot be said to be having any precedentiary value in view of the decisions of the Hon ble High Courts referred to in the said order. Therefore, the principle which emerges from the decisions of the Hon ble High Courts referred to above, if in a particular assessment year, assessee has not earned any exempt income no disallowance u/s 14A can be made. In the facts of the present case, assessee has taken a specific plea that it has not claimed/earned any income which is exempt under the Act. On perusal of the relevant assessment orders it is noticed that AO has only referred to investments made by assessee and not to any exempt income earned by assessee while working out disallowance u/s 14A. Even though, assessee has raised specific ground o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployer is merely custodian, hence, there should not be any delay in remitting the same to the appropriate account. It was submitted, amendment made to section 43B would not apply to employees contribution as such amendment is not with reference to section 36(1)(va). In support of such contention, he relied upon a decision of Hon ble Gujarat High Court in case of CIT Vs. Gujarat State Road Transport Corporation, 366 ITR 170. 15. Opposing the contention of ld. DR, ld. Counsel for assessee submitted before us, after deletion of the second proviso to section 43B of the Act, even employee s contribution to PF ESI if remitted before due date of filing of return as provided u/s 139(1) is allowable as deduction u/s 43B of the Act. In support of such contention, ld. AR relied upon decisions of the Hon ble Himachal Pradesh High Court in case of CIT Vs. Nipso Polyfabriks Ltd., 350 ITR 327 and the decision of the Hon ble Karnataka High Court in case of CIT Vs. Savari Enterprises 298 ITR 141. He therefore submitted that the view taken by ld. CIT(A) being in terms with the decisions of the Hon ble High courts, the order of ld. CIT(A) on the issue should not be disturbed. 16. We have hear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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