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TMI Blog2016 (5) TMI 1528X X X X Extracts X X X X X X X X Extracts X X X X ..... on 14A of the Income-tax Act, 1961 (in short 'the Act') read with Rule 8D of the Income-tax Rules, 1962. 3. Sh. P. Radhakrishnan, the Ld. Departmental Representative, submitted that during the year under consideration, the assessee has invested nearly Rs. 26 Crores in the equity shares of other companies for earning the dividend income. In fact, the assessee earned a dividend income of Rs. 27,22,973/-. The assessee has also borrowed substantial funds and incurred interest expenditure. The assessee claimed before the Assessing Officer that no expenditure was incurred for earning the dividend income / exempted income. However, the Assessing Officer rejected the contention of the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, the CIT(Appeals) restricted the disallowance to Rs. 27,22,973/-. 5. We have considered the rival submissions on either side and perused the relevant material available on record. the CIT(Appeals) found that the assessee has demonstrated that the investments were made from and out of the surplus funds. The CIT(Appeals) has also found that there was no material available on record to suggest that the borrowed funds were used for making the investments. The Assessing Officer observed that in the impugned order that what is required to be seen is whether the assessee had sufficient cash balance at the time of making the investments. This fact was not considered by the CIT(Appeals). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly, the orders of the lower authorities are set aside and the entire issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall reconsider the issue afresh and find out the availability of surplus funds and source thereof and thereafter decide the issue in accordance with law, after giving reasonable opportunity to the assessee. 6. The next ground of appeal is with regard to disallowance of contribution made to ESI and Provident Fund. 7. Sh. P. Radhakrishnan, the Ld. Departmental Representative, submitted that the Assessing Officer found during the course of assessment proceeding that the contribution to Provident Fund and ESI collected from the employees was remitted to the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return of income as specified under Income-tax Act, therefore, no disallowance can be made under Section 43B of the Act. In this case, according to the Ld. representative, the assessee has admittedly paid both employees' and employer's contribution within the due for filing the return of income, therefore, the CIT(Appeals) has rightly allowed the claim of the assessee by following the judgment of Madras High Court. 9. We have considered the rival submissions on either side and perused the relevant material available on record. It is not in dispute that the employees' as well as the employer's contribution to Provident Fund and ESI was deposited before the due date for filing of return of income. The Madras Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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