TMI Blog2017 (11) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... income and deposited taxes thereon. Further in respect of testing charges of ₹ 1,83,732/-, the ld. CIT(A) has confirmed the disallowance on account of non-deduction of TDS following the decision of the Hon’ble Supreme Court in case of Palam Gas Service [2017 (5) TMI 242 - SUPREME COURT ] and in respect of which there is no dispute. We accordingly do not see any infirmity in the order of the ld. CIT(A) hence, the same is confirmed. The ground of appeal taken by the Revenue is dismissed Disallowance of contribution to PF & ESI beyond the prescribed time limit - Held that:- CIT(A) has given a finding that the contribution to PF & ESI has been paid by the appellant before due date of filing the return of income u/s 139(1) and the said finding remained uncontroverted before us. Further, the issues is covered in favour of the assessee by the decision of Hon’ble Rajasthan High Court in case of CIT vs. State Bank of Bikaner & Jaipur and other cases [2014 (5) TMI 222 - RAJASTHAN HIGH COURT] which has rightly been followed by the ld. CIT(A). We accordingly do not see any infirmity in the order of the ld. CIT(A) hence, the same is confirmed. Disallowance u/s 14A - Held that:- I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CIT(Appeals) has erred in deleting the addition of ₹ 27,94,439/- made on account of disallowance u/s 40(a)(ia) without appreciating the fact that the second proviso to this section was inserted w.e.f. 01.04.2013 and it applicable in relation to the AY 2013-14 and subsequent AYrs. ( iii) whether on the facts and in the circumstances of the case and in law, the CIT(Appeals) has erred in deleting the addition of ₹ 21,250/- made by the AO for depositing the employees contribution to PF ESI beyond the prescribed time limit provided in respective Acts. ( iv) whether on the facts and in the circumstances of the case and in law, the CIT(Appeals) has erred in holding that employees contribution to PF ESI are governed by the provisions of section 43B and not by section 36(1) (va) r.w.s. 2(24)(x) of the Act. ( v) whether on the facts and in the circumstances of the case and in law, the CIT(Appeals) has erred in restricting the disallowance made u/s 14A by considering the investment in equity shares of ₹ 40,00,000/- only. Ground of appeal in assessee s cross-objection are as under: ( 1) That ld. CIT(A), after appreciating the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and installation civil work (considered as a building) and on electrical items and internal/external lines (considered as ordinary plant and machinery) on the new windmill purchased during the year as well as on the opening WDV of the Windmills. The facts of this case are similar to the facts in the appellant s case in the preceding years where the CIT(A) and ITAT have decided the matter in appellant s favour. In A.Y. 2005-06, the ITAT (in ITA No. 852/JP/2009) has held that- After hearing both the parties and on perusal of the records, we find that such issue has already been decided by this Bench vide its order dated 18.07.2008 in the cross appeal in I.T.A. No. 745/JP/07 Vijay industries Vs. I.T.O. and in I.T.A. No. 731/JP07- ACIT Vs. M/s Vijay Industries for the assessment year 2003-04. The ld. CIT(A) has following the order of this Bench in the case of Vijay Industries, supra, wherein facts of case are identical to the facts of the present case and we find no infirmity in the order of the ld. CIT(A). Thus Ground No. 1 and 2 of the Revenue are dismissed. This decision has been followed by the ITAT in A.Y. 2007-08 to 2009-10 and by the CIT(A)-II in subsequent ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unable to cause interference in the order passed by the Tribunal. 5. In light of above, respectfully following the decision of the Hon ble Rajasthan High Court in case of Mehru Electricals Mechanical Engg. (P) Ltd. (Supra) and the consistent view taken by the Co-ordinate Benches in assessee s own case in the earlier years, we do not see any infirmity in the order of the ld. CIT(A), hence, the same is confirmed. The ground of appeal taken by the Revenue is dismissed and the cross objection which is in support of the ld. CIT(A) order is allowed. 6. Regarding Ground no. 2 of the Revenue s appeal and the cross objection no. 2(ii) of the assessee s cross objection, the ld AR submitted that the issue is covered in assessee s own case by the Hon ble Tribunal decision for A.Y. 2011-12 and there is no infirmity in the order of the ld CIT(A) who has followed the same and remanded the matter to the AO to verify the certificates given by the payees evidencing reporting of income and payment of taxes thereon. 7. The relevant finding of the ld. CIT(A) is contained at para 3.3 which is reproduced as under:- I have perused the facts of the case, the assessment order and the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt relied on by the assessee has been over ruled. In view of the above discussion, the disallowance with regard to the testing charges is upheld. 8. We have heard the rival contentions and perused the material available on record. We find that the ld. CIT(A) has followed the directions of the Co-ordinate Bench in assessee s own case for A.Y. 2011-12 and has remanded the matter back to the Assessing Officer to verify the certificates from various NBFCs to whom the assessee has paid interest during the year in order to verify where they have offered the same in their return of income and deposited taxes thereon. Further in respect of testing charges of ₹ 1,83,732/-, the ld. CIT(A) has confirmed the disallowance on account of non-deduction of TDS following the decision of the Hon ble Supreme Court in case of Palam Gas Service and in respect of which there is no dispute. We accordingly do not see any infirmity in the order of the ld. CIT(A) hence, the same is confirmed. The ground of appeal taken by the Revenue is dismissed and the cross objection which is in support of the ld. CIT(A) order is allowed. 9. Regarding ground no. 3 and 4 of the Revenue s appeal and the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estment of ₹ 40,00,000/- made during the year is reasonable. Considering the same proportionate deduction would come to ₹ 2,82,352/- which is confirmed. 11. During the course of hearing, the ld AR submitted that the investments in equity shares of M/s Anamika Oil Pvt. Ltd. were made as under: Equity shares 31.03.2011 31.03.2012 Total (31.03.2012) Anamika Oil Pvt. Ltd. 45,07,000 40,00,000 85,07,000 New equity shares of ₹ 40,00,000/- of M/s Anamika Oil Pvt. Ltd. were purchased by the assessee company on 29th March 2012. However ld. CIT(A) sustained addition of ₹ 2,82,352/- on proportionate basis but of ₹ 6,00,493/- without considering following facts: (i) The assessment for the A.Y. 2011-12 was completed u/s 143(3) of IT Act on 23rd December 2011 in which purchase of equity shares of ₹ 45,07,000/- of M/s Anamika Oil Pvt. Ltd. was considered as made out of interest free funds of the assessee company. The question becoming final in preceding year (CIT Vs. Aventis Pharma Ltd. (2017) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 52/- applying provisions of section 14A of IT Act and that too on proportionate basis when shares of Anamika Oil Pvt. Ltd. were purchased on fake end of year on 29.03.2012. 12. We have heard the rival contentions and perused the material available on record. It is noted that the investment worth ₹ 45.07 lacs in equity shares of M/s Anamika Oil Pvt. Ltd. have been made by the assessee in the earlier years and further, fresh investment worth ₹ 40 lacs have been made on 29.03.2012. If we consider the availability of interest free funds during the year, it is noted that interest free funds at the beginning of the year stood at ₹ 20.38 crores and at the end of the year stood at ₹ 25.81 Cr. A presumption will therefore arise that the investment were made out of interest free funds and not out of the borrowed funds especially in view of the fact that no nexus has been established between the borrowed funds and the investment in the equity shares by the AO. In light of above, no disallowance under section 14A is called for in the instant case. The revenue s ground of appeal is dismissed and the assessee s cross objection is allowed. 13. Regarding ground no. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
