TMI Blog2016 (9) TMI 1145X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of assessee as noted that the furniture deposit was old amount given to Sales India and M/s.Santosh Trading for using the existing furniture of these concerns without payment of rent. He has further noted that the deposits have been given for the purpose of business and there was no justification of disallowing the notional interest - Decided against revenue Addition u/s 40A - Held that:- The assessing officer has not properly appreciated the facts and considering the factual aspect of the payment and the fact that no such disallowance was made in the earlier years except in AY 1990-91 which was also deleted and applying the principle of consistency to the similar facts the addition u/s.40A(2)(b) is directed to be deleted and this ground of appeal is allowed in favour of assessee Disallowance of delayed payment of employees’ contribution of ESIC - delayed payment - Held that:- The employees’ contribution of ESIC has not being paid before the due dates and in the absence of any contrary binding decision in favour of assessee, we respectfully following the decision of Hon'ble Gujarat High Court in the case of CIT vs. Gujarat State Road Transport Corporation (2014 (1) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of ₹ 10,715/- made on account of late payment of employee s contribution to P.F. and E.S.I.C. 5) On the facts and in the circumstances of the case, the Ld.Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad ought to have upheld the order of the Assessing Officer. 6) It is therefore, prayed that the order of the Ld.Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad may be set-a-side and that of the order of the Assessing Officer be restored. 2.3. Assessee has raised the following grounds in its Cross Objection bearing No.38/Ahd/2014:- 1. The Assessing officer has erred in law and on facts in taking the ground that the CIT(A) has erred in law and on facts in treating expenditure in respect of show room expenses as revenue expenditure. 2. The Assessing officer has erred in law and on facts in taking the ground that the CIT(A) has erred in law and on facts in deleting the notional addition of ₹ 3,96,000/- on account of interest u/s.36(1)(iii) of the Act. 3. The Assessing officer has erred in law and on facts in taking the ground that the CIT(A) has erred in law and on facts in deleting the addition of ₹ 18,29,568/- made on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e connection, telephone instrument, drainage and sewerage system to run the business. Further the appellant is not allowed to carry out any structural or other alterations or additions or changes without the prior consent. Further the appellant is merely permitted to use the premises for the purpose of operating C-STORE during the agreement and it does not get any right, title or interest of any nature whatsoever in the said premises or any part or portion thereof. Keeping in view the terms of agreement the appellant has incurred impugned expenditure in the rented premises towards false ceiling, fixing tiles, replacing glasses, wooden partitions, electric wiring earthing/replacement of Gl pipes etc. to make the tenanted premises more suitable and conducive to business activity. It has not brought about any new asset and more importantly it was not the intention of the appellant to bring about any new capital asset. The expenses that were incurred by the appellant were towards repairing the premises taken on lease so as to make it more conducive to its business activity. It is seen that these expenditures also includes expenditure by way of replacement /repairing of old existing fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. The issue in the present case is with respect to allowability of expenditure incurred to renovation of expenses. We find that ld.CIT(A) while deciding the issue in favour of assessee has noted that the expenditure incurred was to make tenanted premises more suitable and conducive to business activity and by incurring the expenditure no new asset has been brought into existence. He has also given finding that the expenditure incurred also included expenditure by way of replacement /repairing of old existing furniture and fixtures and modification made to facilitate the display of changed models of products of companies whose goods are sold by assessee. We also find that the Coordinate Bench of the Tribunal (ITAT B Bench Ahmedabad) vide order dated 13/06/2014 in assessee s own case in ITA No.972/Ahd/2011 for AY 2008-09 on identical facts had decided the issue in favour of assessee by holding as under:- 7. We have heard the rival submissions and perused the material on record. We find that CIT(A) after considering the submissions of the Assessee an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment order it is noticed that this disallowance is made because according to him interest free furniture deposit has been given to the Directors. From the facts narrated by the appellant it is seen that this is a old furniture deposit given to M/s.Sales India and M/s.Santosh Trading for using the existing furniture of these concerns without payment of rent and further it is also seen that the amount of ₹ 39,26,520/- for furniture mentioned in the assessment order pertains to furniture of company itself and for this furniture no security deposit has been given. The deposit has been given for the purpose of business. Considering the factual aspects of the deposit and decision of CIT(A) for A.Y. 2008-09, the notional addition of interest of ₹ 3,96,000/- is unjustified and therefore the same is directed to be deleted. The ground of appeal is accordingly allowed. 6.2. Aggrieved by the order of ld.CIT(A), Revenue is in appeal before us. 6.3. Before us, ld.Sr.DR supported the order of ld.CIT(A). Ld.AR reiterated the submissions made before AO and ld.CIT(A) and further submitted that ld.CIT(A) while deciding the issue in favour of assessee had relied on the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red u/s.40A(2)(b) of the Act for advertisement. AO obtained the details from the different advertising agencies wherein he observed that Arts India was getting 15% discount on each and every advertisement but assessee had paid full amount to Arts India. AO was of the view that to the extent of the payment of discount which was received by Arts India and which was not passed on to assessee was excessive and unreasonable and attracted the provisions of section 40A(2)(b) of the Act and accordingly disallowed a sum of ₹ 18,29,568/-. Aggrieved by the order of the AO, assessee carried the matter before the ld.CIT(A), who decided the issue in favour of assessee by holding as under:- 4.3. Decision: I have perused the assessment order and the submissions given by the appellant. From perusal of assessment order it is seen that the assessing officer has disallowed 15% of advertisement expenditure incurred through M/s.Arts India. It also seen that this expenditure has been allowed in the preceding years for which assessment was also framed after scrutiny. From the order of the CIT(Appeals) for AY 1990- 91, it is noticed that disallowance @ 25% of advertisement expenses throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt except in AY 90-91 where disallowance of 25% was made by AO but the same was deleted by CIT(A). Before us nothing has been brought on record to demonstrate that against the order of CIT(A) for AY 90-91. Revenue had preferred appeal before Tribunal meaning thereby that the order of CIT(A) has been accepted by Revenue and has attained finality. Before us no material has been brought to demonstrate as to how the payment made by Assessee to Arts India was excessive. Before us, ld.DR has not brought any material on record to controvert the finding of CIT(A). In view of the aforesaid facts, we find no reason to interfere with the order of CIT(A) and thus this ground of Revenue is dismissed. 10.1. Before us, Revenue has not brought any material on record to controvert the findings of the ld.CIT(A) nor has placed any material to demonstrate that the order of the Coordinate Bench of the Tribunal in assessee s own case for AY 2008-09 has been set aside by Higher Judicial Forum. In view of the aforesaid facts, we see no reason to interfere with the order of the ld.CIT(A) and thus this ground of Revenue is dismissed. 11. Fourth ground of Revenue s appeal is with respect to deleting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs stand today, the contribution to PF/ESIC both by employees or employers contribution towards employees PF/ESIC are allowable u/s.43B provided the same are deposited before the due date of filing return of income u/s.139(1) of the IT Act, 1961. Considering all the facts and circumstances and the fact that the payment has been made before due date of filing of return u/s.139(1) of the Income Tax Act, the disallowance made by the A.O. is directed to be deleted. The ground of appeal is, therefore, allowed. 11.2. Aggrieved by the order of ld.CIT(A), Revenue is in appeal before us. 11.3. Before us, ld.Sr.DR submitted that the order of AO needs to be upheld in view of the binding decision of Hon ble Gujarat High Court in the case of CIT vs. Gujarat State Road Transport Corporation reported in (2014) 366 ITR 170 (Guj.). He therefore submitted that the order of the AO be upheld. Ld.AR, on the other hand, reiterated the submissions made before AO and ld.CIT(A) and supported the order of ld.CIT(A). 12. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. The issue in the present case is with respec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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