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2015 (10) TMI 244 - ITAT PUNE

2015 (10) TMI 244 - ITAT PUNE - TMI - Disallowance of claim of deduction u/s.36(1)(va) - late payment of employee’s contribution towards ESIC though the same was paid before the due date of the return of income - Held that:- It is an admitted fact that the assessee in the instant case has deposited the employees contribution to ESIC after the due dates as per provisions of the ESIC Act. However, it is very clear from the chart that the employees contribution to ESIC fund were made much prior to .....

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section 43B of the I.T. Act, 1961. Since the assessee in the instant case has admittedly deposited the contributions before the due date of filing of the return of income, therefore, no disallowance is called for u/s.36(1)(va) r.w.s. 2(24)(x) warranted - Decided in favour of assessee.

Disallowance of claim proportionate interest on the belief that interest bearing funds were used for extending interest free loans and advances for other than business purpose - Held that:- Since in the .....

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RNATAKA High Court ] - Decided in favour of assessee. - ITA No.410/PN/2014 - Dated:- 4-9-2015 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM For The Assessee by : Shri Kishor Phadke For The Department by : Shri Hitendra Ninave ORDER PER R.K. PANDA, AM : This appeal filed by the assessee is directed against the order dated 31-10-2013 of the CIT(A)-I, Pune relating to Assessment Year 2010-11. 2. Ground of appeal No.1 by the assessee reads as under : 1. The Ld.CIT(A)-I, Pune erred in law and on f .....

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e the due date as prescribed u/s.36(1)(va) of the I.T. Act, the details of such late payments 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 120,76 .....

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al 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 by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is an admitted fact that the assessee in the instant case has deposited the employees contribution .....

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hat the decision of the Supreme Court in Alom Extrusions Ltd. applies to employees contribution as well as employer s contribution and therefore are covered under the amendment to section 43B of the I.T. Act, 1961. Since the assessee in the instant case has admittedly deposited the contributions before the due date of filing of the return of income, therefore, in view of the decision of the Hon ble Bombay High Court in the case of Ghatge Patil Transport Ltd. (Supra) no disallowance is called for .....

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the case, in brief, are that the assessee is a domestic company engaged in the business of Hotel and Hospitality Industry. It filed its return of income on 27-09-2010 declaring total income of ₹ 1,37,01,141/-. During the course of assessment proceedings the AO observed that assessee is having huge interest bearing funds and paying heavy interest on the same. At the same time, the assessee has given interest free loans and advances without any business purposes to 4 persons amounting to &# .....

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ssessee 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 ₹ 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 .....

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he arguments advanced by the assessee. According to him the assessee does not have sufficient interest free funds to meet the interest free loans and advances. Further, there is also no business expediency for extending such loans. Distinguishing the decision of the Hon ble Bombay High Court in the case of Reliance Utilities and Power Ltd. reported in 313 ITR 340 and holding that the assessee has not advanced the funds to sister concerns and the assessee does not have sufficient interest free fu .....

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.03 7.41 Cash Profit 10.07 23.14 12. It was argued that as on 31-03-2010 non-interest bearing funds were far in excess than the interest free loans and advances and hence disallowance of interest is not called for. It was argued that all interest bearing loans from the sister concerns have been used for normal working capital purpose only and during the current year there is reduction in secured and unsecured loan of about ₹ 3.05 crores. Relying on various decisions it was submitted that n .....

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ing to page 46A of the paper book he submitted that the opening balance and closing balance as on 01-04-2008 to 31-03-2009 is ₹ 57,89,180/-. He submitted that the same figure is continuing for the current 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 ₹ 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 ₹ 25 lakhs is .....

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7 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 submitted that the Hon ble High Court in the said decision has held that consiste .....

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rent stand now in respect of the amounts which were the subject matter of previous years assessment. He accordingly submitted that in view of the decision of the Hon ble Karnataka High Court no disallowance is called for since all the loans and advances are brought forward figures from the earlier years and no disallowance was made by the AO in the assessments completed u/s.143(3). 16. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). 17. We have co .....

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Farm Shares on 16-08-2007 is continuing till A.Y. 2010-11. The advance of ₹ 1 crore given to Shri Rajesh Patel during A.Y. 2008-09 is continuing till A.Y. 2010-11. The loan of ₹ 20 lakhs given to Vishwa Bharti Academy on 18-04- 2007 is continuing during A.Y. 2010-11. There is no further addition or subtraction in respect of the above 4 parties. From the copy of the assessment orders passed u/s.143(3) for A.Y. 2008-09 till 2010-11 in case of the assessee reveal that no such disallowa .....

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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 .....

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ars when moneys had been advanced to N, the opening balances could not be considered in this year. In respect of advances made during the accounting year, the matter had to be remitted to find out whether they came out of borrowed funds or not and if it was shown to be out of funds not borrowed, then no disallowance could be made. On a reference, the Revenue contended that the remand should comprise the question pertaining to the opening balance advanced to N. The Hon ble High Court at page 168 .....

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