TMI Blog2015 (12) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... ries, its effect on book profits and as to how the action of the AO was not justified, therefore, no interference is called for in ld. CIT(A)'s order. PF and ESI contribution of the employees - Held that:- As the assessee had actually paid the PF & ESI contributions before due date of filing of the return which has not been disputed by the ld. DR at the time of hearing. - Decided in favour of the assessee. Disallowance on vehicle and telephone expenses - Held that:- We have found that the assessee has paid FBT tax thereon. Besides, this issue stands decided in favour of the assessee by the Hon'ble Gujarat High Court in the case of Sayaji Iron and Engg. Co.vs CIT [2001 (7) TMI 70 - GUJARAT High Court] holding as the Tribunal was wrong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t had not been claimed by the assessee in the return of income, and in fact the assessee had itself disallowed it in computing income, in the earlier years. (v) The ld. CIT(A) has erred in deleting the disallowance of ₹ 43,15,723/- u/s 43B by overlooking the provision of Section 36(1)(va) of the I.T. Act. (vi) The ld. CIT(A) has erred in deleting the disallowance on vehicle/ telephone on the ground of absence of personal element, overlooking the fact of non-production of details, sought in this regard. 2. During the course of hearing the ld. DR relied on the order of the AO 3. The ld. AR contends that Ground Nos. (i) to (iv) raises the issue about working out of reduction of book profit of ₹ 3,94,67,254/-. It is plea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier assessment years, therefore, due to the above accounting treatment, the book profit of the appellant had notionally increases by ₹ 39467254/-, which was required to be deducted, to arrive at the actual income for taxation purpose. However, from the assessment order it is evident that in the computation income, the AO has also taken the same book profit (i.e. ₹ 66915318/-) as base to arrive at the taxable income of the appellant as such. However, while doing so, he did not reduce the above book profit, by the artificial increment in income in the form of remission of nterest, as discussed above. As stated above, he simply allowed the payment of interest to extent of ₹ 12601711/-, which was actually paid by the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed in the books but not paid and disallowed u/s. 43B of the Act. III. The working of total interest liability, the actual amount paid in this regard and the quantum of the remission of interest etc., as discussed in the tabular form, in the earlier part of the order etc. also substantiate the factual and relevant figures, as claimed by the appellant in this regard. In view of the above factual accounting and assessment position, it is found that in real terms, the appellant was not allowed the claims of the above interest expenditure in the respective returns of income as such. Thus, due to cessation of unclaimed interest liability of ₹ 3,94,67,254/- and given effect thereof in the books of accounts has in fact resulted in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent of ₹ 39467254/-. Consequently this ground of appeal is upheld.'' Since the ld. CIT(A) has given detailed account of the nature of the entries, its effect on book profits and as to how the action of the AO was not justified, therefore, no interference is called for in ld. CIT(A)'s order. 4. Coming to Ground No. (v), it is pleaded that in respect of PF and ESI contribution of the employees which was actually paid before due date of filing of return. Reliance is placed of Hon'ble Delhi High Court decision in the case of CIT vs. Aimil Ltd. 321 ITR 508 in which it has been held that if the PF ESI payments are made before due date filing of return, the same is allowed as business expenditure. To this effect, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had actually paid the PF ESI contributions before due date of filing of the return which has not been disputed by the ld. DR at the time of hearing. In view thereof, the issue raised in Ground No. (v) is dismissed. 8. Adverting the last ground i.e. Ground No. (vi) of the Revenue regarding adhoc disallowance on vehicle and telephone expenses. We have found that the assessee has paid FBT tax thereon. Besides, this issue stands decided in favour of the assessee by the Hon'ble Gujarat High Court in the case of Sayaji Iron and Engg. Co.vs CIT ,253 ITR 749 holding as under:- ''In the circumstances, in our opinion, the Tribunal was wrong while disallowing 1/6th of the total car expenditure and depreciation claimed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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