TMI Blog2019 (7) TMI 700X X X X Extracts X X X X X X X X Extracts X X X X ..... affirmative, i.e. in favour of the assessee and against the revenue. Addition on account of rates and taxes - CIT-A deleted the addition - HELD THAT:- CIT(A) has allowed such expenses under the head rates and taxes in terms of the provision of section 43B of the Act in those year under consideration. The assessee has claimed the expenses under the head rates and taxes in terms of the provision of section 43B. The details of payment made before the due date of filing of return which was claimed as allowable expenses were also placed on record by the assessee. AO while holding such explanation rendered by the assessee not acceptable also invoked section 14A for the purpose of computing total income of the assessee indicating that 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. CIT(A) following the same deleted such addition which, in our considered view is just and proper following the rule of consistency which has been failed to be controverted by the Revenue. Hence, this ground of appeal preferred by the Revenue is found to be devoid of any merit and thus dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the present facts Disallowance of contribution to employee s provident fund - HELD THAT:- As per assessee that the issue be remitted to the file of the Learned AO for verification of such contention made by the assessee and to grant relief thereof. DR, however, has failed to controvert such contention made by the representative of the assessee. Hence, we set aside the issue to the file of the Learned AO for verification of the same upon considering the evidence on record and also considering the evidences which the assessee may choose to file at the time of hearing of the matter and to pass orders in accordance with law positively upon affording an opportunity of being heard to the assessee. In the result, assessee s ground of appeal is allowed for statistical purposes. Accrual of income - addition on account of interest income - HELD THAT:- The interest income earned from the differences of GMR, GSFS and SBI was ultimately added by the Learned AO to the income of the assessee on the ground that both the parties have confirmed the correctness of payment of amount and deduction of TDS. In appeal the Learned CIT(A) restricted it to GSFS and SBI. As we find from the record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 31.03.2015 passed by the Income Tax Officer, Ward-2, Gandhinagar u/s 143(3) of the Act for A.Y. 2012-13. Since all the appeals relate to the same assessee, the same are heard analogously and are being disposed of by a common order. ITA No. 1172/Ahd/2016 A.Y. 2011-12 (Revenue s appeal) : 2. Ground No.1 : The order passed by the Learned CIT(A) in allowing the revised computation of income has been challenged by the department. 3. The brief facts leading to the case is this that the assessee company filed its return of income declaring total income at ₹ 4,72,68,230/- on 29.09.2011. The income u/s 115JB has been stated to be ₹ 7,35,54,261/-. During the course of assessment proceeding, the assessee was asked to file the copy of income tax return, statement of computation of income and tax audit report. In response thereto by and under a letter dated 01.08.2013, the assessee replied referring a letter dated 30.12.2011 filed to the Learned JCIT, Gandhinagar Range on 02.02.2012 informing him that the return was filed on 29.09.2011 on the basis of provisional accounts. However, after t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther hand he has made disallowance and additions based on such revised income which is contradictory and thus disallowance is liable to be deleted. On the other hand, the Learned DR relied upon the order passed by the Learned AO. 6. Heard the respective parties, perused the relevant materials available on record. It appears from the records that the Learned AO has disallowed ₹ 56,42,795/- on the ground that the appellant has revised its income without filing a revised return. On the other hand, it was the case of the assessee that the return was filed based on provisional, un-audited accounts and upon finalization of such accounts on 01.12.2011 a revised computation of income was prepared which was made known to the authorities with a request to consider the same on 30.12.2011. This is just a revised statement that too much prior to the issuance of notice u/s 143(2) dated 10.09.2012. Thus, it is an admitted fact that appellant has revised its income on its own after finalization of accounts. We have also carefully considered the order passed by the Learned CIT(A) who has taken into consideration the entire aspect of the matter. When the Learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble expenses were also placed on record by the assessee. The Learned AO while holding such explanation rendered by the assessee not acceptable also invoked section 14A for the purpose of computing total income of the assessee indicating that 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. Ultimately, an amount of ₹ 45,12,220/- was disallowed. On the other hand, we find from the records that the issue has already been decided by the predecessor of the Learned CIT(A) for A.Y. 2005-06 with the following observation: Besides the fact that the expenses involved are recurring in nature and do not bring into existence ant new fixed assets, as emphasized by the Authorized Representative, laying out of such expenses is a necessity to keep control on the assets: Payment of taxes of any kind, whether one time at recurring nature, never enhance the value of the asset being used in question nor brings into existence of any advantage of enduring nature, Clearly, land revenue, though levied on the land, a fixed asset for the appellant, in it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g for the assessee submitted before us that the issue is squarely covered by the judgment passed by the Hon ble Gujarat High Court in the matter of PCIT-vs-Shreno Ltd. reported in [2019] 102 taxmann.com 129 (Gujarat). On the contrary the Learned DR relied upon the order passed by the Learned AO. 13. Heard the respective parties, perused the relevant materials available on record. It appears from the records that the assessee has received dividend income of ₹ 1,60,74,728/- from shares held by it. Taking into consideration the disallowance made in the earlier year the Learned AO has applied section 14A r.w.r. 8D of the Income Tax Rule and disallowed the impugned amount of ₹ 47,23,579/-. However, it has been pointed out by the Learned CIT(A) that most of the investment made by the assessee were not earlier years. We have also considered the judgment passed by the Jurisdictional High Court in the matter of PCIT-vs-Shreno Ltd. In the said matter, business funds and investment funds of the assessee were mixed up and it was not appreciated by the Learned AO in holding that the funds deployed for earning tax free income were entirely out of int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lying upon the judgment passed by the CIT-vs-Southern Roadways Ltd. (supra). Hence, the appeal. 16. At the time of hearing of the instant appeal, the Learned Senior Counsel relied upon the order passed by the Learned CIT(A). Further that he has also placed reliance in the matter of N. J. India Invest Ltd. reported in 215 Taxman 78 (Guj) in support of his argument in favour of the assessee. However, the Learned DR failed to controvert such contention made by the Learned Senior Counsel appearing for the assessee. It is a settled principle of law that the expenditure in question is Revenue in nature and thus allowable as decided in different pronouncement including in the matter of N. G. India Invest Ltd. as relied upon by the Learned AR. Hence, we find no infirmity in the order passed by the Learned CIT in deleting such addition relying upon the ratio laid down as above. Thus Revenue s appeal is found to be devoid of any merit, hence dismissed. 17. Ground No.5 This issue relates to deleting addition on account of depreciation on printers and other accessories. 18. The assessee claimed depreciation at 60% on equipments other than co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,23,579/- and disallowance of ₹ 1,00,000/- u/s 14A made by the appellant has been directed to be considered while calculating income u/s 115JB by the Learned AO which has been challenged before us by the Revenue. The explanation given by the Learned CIT(A) in passing such direction upon the Learned AO is according to us justified in the present facts and circumstances of the case and hence upheld. 23. In the result, revenue s appeal is dismissed. ITA No.1361/Ahd/2016 for A.Y. 2011-12 (Assessee s appeal): 24. Ground No.1 This ground relates to disallowance of contribution to employee s provident fund of ₹ 3,35,551/-. 25. The assessee has made the payment of employee s contribution of an amount of ₹ 3,35,551/- towards Provident Fund beyond due date on certain occasions which was disallowed and added to the total income of the assessee in view of the judgment passed by the Jurisdictional High Court in the case of CIT-vs-Gujarat State Road Transport Corporation. In appeal, the same was confirmed in terms of section 36(1)(va). It is the case of the assessee that such payment was made within grac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction of TDS. In appeal the Learned CIT(A) restricted it to GSFS and SBI. As we find from the records as well as the orders impugned before us that in support of recording the assessee has reiterated his plea that the assessee company booked its income as per books of accounts and the policies regularly followed by the company. However, no supporting documents has been placed by the assessee either before the Learned AO or before the first appellate authority showing that the amount received from GSFS and SBI was offered as income though TDS has been claimed by the assessee and hence we do not find any merit in the Learned AR s submission on this issue for deletion of such addition on the basis of the judgment passed in the matter of DCIT-vs-Yahoo India Pvt. Ltd. reported in ITA No.3800/Mum./2014 for A.Y. 2008-09. We, therefore, confirm the addition made by the authorities below and dismiss the ground of appeal of the assessee. 28. Ground No.3 This ground of appeal is consequential in nature hence no order need be passed. ITA No.1928/Ahd/2016 for A.Y. 2012-13 (Assessee s appeal): 29. Ground No.1 This ground relates to disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mported into clause (f). In support of his argument he has also relied upon the judgment passed by the Special Bench of ITAT at Delhi in the matter of ACIT, Circle 17(1)-vs-Vireet Investment (P.) Ltd. On the other hand, Learned DR relied upon the order passed by the authorities below. 34. Heard the respective parties, perused the relevant materials available on record. We have also carefully considered the judgment in the matter of Vireet Investment (P.) Ltd. The relevant portion whereof is as follows: The question is, whether the amount or amounts of expenditure relatable to exempt income as contemplated in clause (f) to Explanation 1 to section 115JB(2) could be arrived at by resorting to provisions of section 14A or not. The department, contention, is that the object of section 14A and clause (f) to Explanation 1 to section 115JB(2) is same and, therefore, it cannot be disputed that section 14A can be resorted to for finding out the expenditure relatable to any income which is exempt. [Para 6.2] When the question arises as to the applicability of similar provisions in different parts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore deleted. This ground of appeal preferred by the assessee is thus allowed. 35. Ground No.3 This ground relates to disallowance of belated contribution to Employees Provident Fund of ₹ 83,651/-. 36. It was found from the records that the Provident Fund in respect of employee s contribution was made late i.e. beyond the due date on certain occasion by the assessee details whereof is reflected in the order passed by the Learned AO. Finally relying upon the judgment passed by the Jurisdictional High Court in the matter of CIT-vs-GSRTC Ltd. reported in 366 ITR 170 (Guj) in view of the provision laid down u/s 36(1)(va) of the Income Tax Act, 1961 read with section 2(24)(x), total sum of ₹ 6,51,122 was disallowed since the said sum was credited by the assessee to the employee s accounts in the relevant fund after the due date prescribed in the concern Act which was confirmed by the First Appellate Authority. 37. At the time of hearing of the instant appeal, the Learned Senior Counsel appearing for the assessee fairly submitted before us that the issue has been decided by the Jurisdictional High Court in the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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