9911796707
TMI Blog2015 (10) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... are as under : Month Employee's Share Employer Share Total amount collected Total amount paid Date of Payment Due date Apr-09 24,743 66,961 91,704 91,704 27-May-09 21-May-09 jun-09 24,444 66,179 90,623 90,623 23-jul-09 21-Jul-09 jul-09 24,126 65,287 89,413 89,413 24-Aug-09 21-Aug-09 Aug-09 24,000 64,981 88,981 88,981 23-Sep-09 21-Sep-09 Sep-09 23,452 63,492 86,944 86,944 23-0ct-09 21-0ct-09 Total 120,765 326,900 447,665 447,665 4. According to the AO it is mandatory for the employer to make payments of contribution received from employees towards ESIC fund within the due date for deduction u/s.36(1)(va) of the Act. Rejecting the various explanations given by the assessee and distinguishing the various decisions cited before him the AO made addition of Rs. 1,20,765/- u/s. 36(1)(va) to the total income of the assessee holding that provisions section 43B will not come into picture. 5. In appeal the Ld.CIT(A) distinguishing the various decisions cited before him upheld the action of the AO. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 6. We have considered the rival arguments made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25,00,000/- c) Rajesh Patel Rs.1,00,00,000/- d) Vishwa Bharati Rs.20,00,000/- Total Rs.2,02,89,180/- (In the assessment order the amount of Rs. 57,89,180/- wrongly taken by the AO as Rs. 25,00,000/- in case of Mr. S.K. Agarwal. Similarly, the figure of Rs. 25,00,000/- in case of Ritz Farm Shelters wrongly taken as Rs. 57,89,180/-) 9. He therefore asked the assessee to explain as to why proportionate interest should not be disallowed. It was explained by the assessee that it has not extended any business funds for nonbusiness purposes. It was explained that the company has adequate own funds. The total non-interest bearing own funds are to the tune of Rs. 87.16 crores. Relying on various decisions it was submitted that no disallowance is called for. The assessee further submitted that all the loans are strictly monitored by the lending bank and the loans cannot be diverted for any non-business purposes. It was further submitted that there are no non-business investments existing and there is no direct link between the borrowed funds against non-business investments. It was further argued that even if the advances are identified notionally for non-business p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent assessment year. Referring to page 47 of the paper book he drew the attention of the Bench to the amount given to Ritz Farm Shares amounting to Rs. 25 lakhs. Referring to page 47A of the paper book he submitted that as on 01-04-2008 to 31-03-2009 the same figure of Rs. 25 lakhs is continuing. Referring to page 48 of the paper book the Ld. Counsel for the assessee drew the attention of the Bench to the ledger account of Shri Rajesh Patel according to which an amount of Rs. 1 crore given on 24-07-2007 is continuing for the period from 01-04-2008 to 31-03-2009. He submitted that the same figure is continuing for the current assessment year. Referring to page 49 of the paper book he submitted that the amount of Rs. 20 lakhs given to Vishwa Bharti Academy on 18-04-2007 is continuing in A.Y. 2009-10 without any change. 15. Referring to the assessment orders for A.Yrs. 2007-08 to 2009- 10 passed u/s.143(3) he submitted that no disallowance of any such interest on this account has been made by the AO on account of advances given to the above 4 persons. Referring to the decision of the Hon'ble Karnataka High Court in the case of CIT Vs. Sridev Enterprises reported in 192 ITR 165 he sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee firm ended on 31-03-1978. During this accounting year, the assessee had advanced certain sums to a firm, N. The balance outstanding from the firm, N, was Rs. 2,55,750/- as on March 31, 1978. No interest was charged against this advance. The assessee had borrowed from third parties and had been paying interest thereon. This interest was claimed as a deduction out of the assessee's income. Some of the partners of the assessee and the firm, N, were common and they had business links inter se. In these circumstances, the assessing authority disallowed the deduction claimed by the assessee to the extent of interest-free advances standing in the name of N on the ground that the amounts borrowed by the assessee were not utilised by the assessee for its own business but were diverted as advance to N free of interest. However, to the extent of advance shown as existing against N on the first day of the accounting year, which was the net balance of advances made during the previous accounting year, the same was excluded for the purpose of computing disallowance of deduction. The Tribunal held that since there were no disallowances in the past years when moneys had been advanced to N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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