TMI Blog2016 (1) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance - Held that:- It is not disputed by the Revenue that the assessee has not paid the employees contribution received by it before the due date of filing of the return. The Hon'ble Jurisdictional High Court in the case of CIT v. Nexus Computer (P) Ltd. [2008 (8) TMI 304 - MADRAS HIGH COURT ] has held that the PF and ESI contribution paid belatedly, but prior to due date of filing of return could not be disallowed under section 43B of the Act. Therefore, we direct the Assessing Officer to delete the addition made on this issue. Accordingly, the ground raised by the Revenue is dismissed. - Decided in favour of assessee Disallowance of expenditure claimed as revenue in nature under section 37 - Held that:- Assessee has not constructed any annexe to the existing building. Further, the Revenue could not prove that there is an addition to the rooms/restaurant of the existing building or created any annexe to the building as contended by the ld. DR. Under the above facts and circumstances, we find that the ld. CIT(A) has rightly followed the decision of the Hon'ble Jurisdictional High Court in the case of CIT v. Ooty Dasaprakash (1998 (2) TMI 77 - MADRAS High Court), wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer enquired about the applicability of section 14A, the assessee has stated that its entire investment was out of surplus generated from business expenditure attributable to earn this exempt income. However, the Assessing Officer has observed that the assessee would have used its office establishment as well as its staff and also the investments made requires specialized attention to monitor and it cannot be denied that there was a hidden cost in the overall cost to the company. Accordingly by applying second and third limbs of Rule 8D, the Assessing Officer computed the disallowance under section 14A of the Act at ₹ 2,33,324/-. 4. On appeal, the ld. CIT(A), after considering the submissions of the assessee, confirmed the disallowance made by the Assessing Officer. 5. On being aggrieved, the assessee is in appeal before the Tribunal and the ld. Counsel for the assessee strongly contended that the disallowance under section 14A r.w.Rule 8D made by the Assessing Officer was many fold and it should not be more than the dividend income earned by the assessee and at the best the disallowance should be restricted to the amount of exempt income. 6. On the other hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer was set aside. The initiation of penalty proceedings also was set aside. The matter was remitted to the Assessing Officer for fresh consideration. 8. In the present case, the assessee has earned exempt dividend income of ₹ 2,715/-. The assessee has not admitted any expenses to earn the above dividend income. The Assessing Officer disallowed the expenses to the tune of ₹ 2,33,324/- by invoking section 14A r.w.r. 8D. By taking into consideration of the facts and circumstances of the present case and keeping in view of the above decision of the Hon'ble Delhi High Court, we are of the opinion that the Assessing Officer is not justified in making excessive disallowance. Therefore, we restrict the disallowance made by the Assessing Officer to the extent of exempt income earned by the assessee and accordingly, the ground raised by the assessee is allowed. 9. In Revenue's appeal, the first ground raised by the Revenue relates to deleting the disallowance under section 36(1)(va) of the Act. In the assessment order, the Assessing Officer has observed that the employees contribution of PF amounting to ₹ 1,02,818/- in the Ernakulam Branch has not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulk quantity of building materials like cement, bricks, iron steel, flooring materials, etc. and also noticed that cements were purchased in the range of 40 to 50 bags and iron steel were purchased in huge quantities in kilograms. Therefore, the Assessing Officer has held that such huge quantities of materials could have been used only to extend the property to carry out really major repairs which will give enduring benefit to the assessee running into number of years and it is only but fair that these expenditures were also claimed over a period of time by classifying it as capital expenditure. Accordingly, the Assessing Officer has held that some of the expenditure relates to some minor repair items, out of the total expenditure of ₹ 43,29,728/- spent for renovation of hotel property and the balance expenditure of ₹ 33,31,189/- was treated it as capital in nature. 14. On appeal, after considering the detailed submission of the assessee and by following the decision of the Hon'ble Jurisdictional High Court in the case of CIT v. Ooty Dasaprakash 237 ITR 902, the ld. CIT(A) and treated the expenditure as revenue in nature and accordingly, allowed the ground ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards repair of the building viz., in the ground floor : (i) renovate the walls/floor of the existing lobby - red stone, bajri gitty, (ii) central courtyards to be opened up to allow for air circulation, (iii) Accounts administration department was shifted behind the reception, (iv) flooring of the staircase to be replaced, (v) passage between kitchen and restaurant - walls and flooring to be replaced, (vi) open up the walls of the restaurant towards the swimming pool, (vii) termite infested wooden doors to be replaced and in the first floor (i) toilets to be renovated - tiles tookal (ii) roof of five existing rooms - roof to be patched. Over and above, the assessee has not constructed any annexe to the existing building. Further, the Revenue could not prove that there is an addition to the rooms/restaurant of the existing building or created any annexe to the building as contended by the ld. DR. Under the above facts and circumstances, we find that the ld. CIT(A) has rightly followed the decision of the Hon'ble Jurisdictional High Court in the case of CIT v. Ooty Dasaprakash (supra), wherein the Hon'ble High ..... X X X X Extracts X X X X X X X X Extracts X X X X
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