TMI Blog2019 (1) TMI 1143X X X X Extracts X X X X X X X X Extracts X X X X ..... y applies. We answer the question partly in favour of the revenue and partly in favour of the assessee. Addition u/s 14A - Held that:- No substantial question of law since the Tribunal has made a remand. We also notice that as of now the issue stands covered in favour of the assessee in Commissioner of Income Tax v. Essar Teleholdings Ltd. [2018 (2) TMI 115 - SUPREME COURT OF INDIA] as found that the machinery provisions having been brought under the Rules only from the assessment year 2007-08; the disallowance under Section 14A could be only from that year. We hence decline to answer the question of law. Staff Welfare Scheme - whether amount credited to the Staff Welfare Scheme as akin to the sundry creditors and hence a permissible deduction? - Held that:- since the employer having shown the amount in the salary slip of the employee and retained the same with the employer; it becomes an income includable under Section 2(24)(x). When the amount is included as income of the employee, then retention of the same by the employer, makes it the income of the employer, makes otherwise exempted or permitted deduction under the Act. Deduction under Section 36(1)(va) permeability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... With respect to the question under Section 94, the issue arose on the assessee purchasing certain units on the record date (the day fixed for declaring dividend) and selling it within or just outside a three month period. Section 94(7) as extracted by the Tribunal, in existence during the subject assessment year, is extracted herein also: Section 94(7): a) any person buys or acquires any securities or unit within a period of three months prior to the record date; b) such person sells or transfers such securities or unit within a period of three months after such date; c) the dividend or income on such securities or unit received or receivable by such person is exempt, then, the loss, if any, arising to him on account of such purchase and sale of securities or unit, to the extent such loss does not exceed the amount of dividend or income received or receivable on such securities or unit, shall be ignored for the purposes of computing his income chargeable to tax 4. The Tribunal agreed with the CIT appeals that the purchase being on the record date cannot be said to be within a period of three months prior to the record date. We do not think such an interpret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aram Bond Annual Plan on the record date, 07.11.2003 was sold on 09.02.2004. The three month period expires on 7.2.2004, two days before the sale was effected. Hence in these three items the sale was made after the period provided under Section 94(7)(1)(b). 8. As to the other three purchases made of Sundaram Bond Half Yearly; it was on the record date 26.12.2003. Computing the three months period from 27.12.2013 it expires on 26.03.2004 when the sale was made. The said sale has to be found as having been made within the three months period. Hence with respect to the units purchased and sold of Sundaram Bond Half Yearly Section 94 squarely applies. We answer the question partly in favour of the revenue and partly in favour of the assessee. 9. On the issue of 14A deduction, there is no substantial question of law since the Tribunal has made a remand. We also notice that as of now the issue stands covered in favour of the assessee in Commissioner of Income Tax v. Essar Teleholdings Ltd., [(2018) 101 CCH 0021 I SCC((2018) 401 ITR 445 (SC))] . The Hon'ble Supreme Court has found that the machinery provisions having been brought under the Rules only from the assessment year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the employee's account in the relevant fund or funds on or before the due date 13. The provision does not speak of an approved or a statutory fund and the words employed are: sum credited by the assessee to the employee's account in the relevant fund . Admittedly, there is a welfare scheme for the employees as spoken of in sub-section (x) of Section 2(14). The amounts though credited in a common account the amounts retained from an individual employee, whose credits are evident from the books of accounts, along with interest accrued on such amounts is eventually payable to that employee. We find from the order of the First Appellate Authority that the amounts retained with the employer and the interest accrued in the name of a particular employee, was taxed in the hands of that employee. Hence though there is a common fund and accrual of interest, the same has to be treated as having been credited separately on the employees account in the relevant fund; the principal and interest accrued, being eventually payable to the employee on his superannuation. We hence find that the deduction under Section 36(1)(va) is permissible. 14. We find that the assessee had cla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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