TMI Blog2016 (1) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... company for the purpose of investment in the share market. In view of these facts, we do not find any infirmity in the conclusion of the ld. CIT(A) in this regard. - Decided in favour of assessee. Disallowance on account of delayed payments of employees contribution to ESIC/EPF - CIT(A) deleted the addition - Held that:- Where payments of EPF contribution if made after the due date prescribed under the relevant Act and Rules, but before the due date of furnishing the return of income under section 139(1), would be eligible for deduction under section 36(1)(va) read with section 2(24)(x) and sec. 43B. In the instant case, it is not in dispute that the assessee had made the payments before the due date of filing the return of income. No contrary law is placed by the ld. DR. Therefore, we do not find any infirmity in the conclusion of the ld. CIT(A) for deleting the disallowance made by the AO on this count.- Decided in favour of assessee. - ITA No. 5477/Del./2012 - - - Dated:- 16-10-2015 - SHRI I.C SUDHIR, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER For The Revenue : Shri P. DAM Kanunjna, Sr. DR For The Assessee : Shri Arun Kushore, C.A. ORDER Per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deleted. Grounds in ITA No. 2392/Del./2013 (By Assessee for A.Y. 2009-10): 1. That on the facts and circumstances of the case, the order of the CIT(Appeals) dt. 13.03.2013 in appeal no. 140/11-12, to the extent mentioned hereunder is illegal unjust and opposed to facts. 2(i). That learned CIT(Appeals) has erred in conforming addition of ₹ 1,31,52,337/- u/s. 14A of the IT Act, 1961. (ii). That the investments owned by the appellant are not covered with the ambit of Sec. 14A of the Act and rule 8D of the IT Rules. (iii). That the learned AO has not recorded his satisfaction in respect of the computation filed by the appellant. (iv). That the learned AO has applied the mechanical provisions irrespective of the circumstances of the present case. (v). That without prejudice to the above contention the working of the disallowance as directed by the CIT(Appeals) is erroneous which needs to be corrected in accordance with sec. 14A read with Rule 8D. 3. That the addition of ₹ 1,31,52,337/- made u/s. 14A of the Act be deleted and consequential interest charged u/s. 234 of the Act be also deleted. 3. First, we take up the cross ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in time, observing that the employees/employer contribution, if paid prior to the due date of filing of return would be eligible for deduction u/s 36(1)(va) read with section 2(24)(x) and 43B of the Act. Both the parties were not satisfied by the impugned order, hence, these cross appeals by the Revenue and assessee. 4. During the course of hearing, the learned DR submitted that the ld. CIT(A) is not justified to direct the AO to recomputed the disallowance u/s. 14A after considering the interest amount of only ₹ 6,86,69,493/- instead of ₹ 11,69,94,410/-. It was submitted that the definition of interest is wide enough to cover the bank charges, discounting charges and hire charges etc. He contended that proportionate disallowance of interest amounting to ₹ 52,44,823/- has been wrongly deleted by the ld. CIT(A). It was also submitted that late deposition of EPF/ESI contribution suggest the disallowance u/s. 2(24)(x), which the ld. CIT(A) has wrongly deleted. He therefore, contended that the appeal of the Revenue is liable to be allowed. 5. On the other hand, the ld. Counsel for the assessee contended that no disallowance u/s. 14A is called for. The AO has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under this Act. (2) The Assessing Officer shall determine the amount of expenditure incurred in relation to such income which does not form part of the total income under this Act in accordance with such method as may be prescribed1, if the Assessing Officer, having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to income which does not form part of the total income under this Act. (3) The provisions of sub-section (2) shall also apply in relation to a case where an assessee claims that no expenditure has been incurred by him in relation to income which does not form part of the total income under this Act : Provided that nothing contained in this section shall empower the Assessing Officer either to reassess under section 147 or pass an order enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee under section 154, for any assessment year beginning on or b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in paying the tax under section 115-O and in the hands of the recipient shareholder dividend does not form part of the total income. He also observed that section 10(33) clearly evinces Parliamentary intent that incomes from dividend and from mutual funds are not includible in the total income. He relied on the decision of Hon ble Bombay High Court in the case of Godrej Boyce Mfg. Co. Ltd. vs. CIT that the provisions of rule 8D of the Rules which have been notified w.e.f. 24.03.2008 would apply with effect from A.Y. 2008-09, but even prior to assessment year 2008-09 when rule 8D was not applicable, the Assessing Officer had to enforce the provisions of sub-section (1) of section 14A. He therefore, affirmed the action of the Assessing Officer for working out the disallowable expenditure u/s. 14A, but modified the working of such disallowable expenditure as made by the Assessing Officer. 8. We have gone through the computation of income placed by assessee at page 27 of the paper book where it is seen that during the year no any exempt income is shown to have been received by the assessee. The income shown in the computation of income is tallied with the return of income filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said to be justified in disallowing the proportionate interest. Besides, the ld. CIT(A) after considering various documentary evidences submitted before him by assessee u/r 46A, has elaborately discussed the advances given to above three parties He has rightly held that when the recovery of the principal amount itself was doubtful, there was no question of providing for interest on the same in the case of M/s. Boeing Investments Private Limited. Similarly, with respect to M/s. M.K. Marketing, after considering the copy of account found that the said concern was a C F Agent and the transactions carried with it during the year were all business transactions. He, therefore, rightly held that no disallowance is called for in respect of the business transactions dealt with this party. With respect to other party, namely, M/s. Brics Securities Ltd., the ld. CIT(A) has considered the joint venture agreement with the assessee and its group company M/s. MVL Ltd. (Joint venture partner), the money of the assessee was utilized by the group company for making investments in stock exchange and the resultant profit, if any was agreed to be equally divided between the two entities and in cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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