TMI Blog2018 (3) TMI 1876X X X X Extracts X X X X X X X X Extracts X X X X ..... 1)? - HELD THAT:- The provisions of sec. 40(a)(ia) amended by Finance Act 2010 provides that no disallowance shall be made u/s 40(a)(ia) of the Act shall be made, if the TDS amount is remitted before the due date for filing return of income u/s 139(1) of the Act. Accordingly, if the assessee has paid the TDS amount before the due date for filing return of income u/s 139(1) of the Act, no disallowance u/s 40(a)(ia) is required to be made. Accordingly we modify the order passed by Ld CIT(A) and direct the AO to verify the date of payment of TDS amount and delete the disallowance if the TDS amount is paid before the due date for filing return of income u/s 139(1) . Addition of notional interest in respect of interest free loan given to Thailand subsidiary - HELD THAT:- Identical addition was also made in AY 2008-09 and the Tribunal has restored the issue to the file of the AO to examine the issue afresh by following the decision rendered by Hon ble Bombay High Court in the case of CIT Vs. Tata Auto-Comp Systems ( 2015 (4) TMI 681 - BOMBAY HIGH COURT ). Consistent with the view taken by the Tribunal in AY 2008-09, we restore this issue to the file of the AO with similar direction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... called for. Accordingly we modify the order passed by Ld CIT(A) on this issue and direct the AO to delete the disallowance of interest expenditure u/s 8D(2)(ii) of the I T Rules. Disallowance made out of administrative expenses under Rule 8D(2)(iii) of the IT Rules, we notice that the assessee has brought forward most of the investments from the prior year. During the year under consideration, the assessee has made a fresh investment of ₹ 11.25 lakhs in a joint venture company. The assessee has received dividend income of ₹ 1.24 lakhs. Thus we notice that the activity of the assessee in the investment portfolio is very minimal. Under these set of facts, we are of the view that the application of Rule 8D(2)(iii) is not warranted in this case. Considering the activities of the assessee, we are of the view that a round sum disallowance of ₹ 10,000/- out of administrative expenses would meet the requirement of sec. 14A of the Act. Accordingly we modify the order passed by Ld CIT(A) and direct the AO to restrict the disallowance out of administrative expenses to ₹ 10,000/-. - I.T.A. No. 3770/Mum/2014, I.T.A. No. 3785/Mum/2014, I.T.A. No. 4133/Mum/2014 And ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions. 5. The second individual issue urged by the assessee in AY 2009-10 relates to the disallowance made u/s 40(a)(ia) of the Act. The AO disallowed a sum of ₹ 123.06 lakhs u/s 40(a)(ia) of the Act by holding that the payment of TDS has not been made in time. The assessee claimed that it has remitted the TDS amount before the due date for filing return of income and hence no disallowance was called for as per the proviso inserted to sec. 40(a)(ia) of the Act by Finance Act, 2010. The tax authorities did not accept the contentions of the assessee. 6. We notice that identical disallowance was made in AY 2008-09 also. Before the Tribunal, the assessee relied upon the decision rendered Hon ble Calcutta High Court in the case of CIT Vs. Virgin Creations (ITA No.302 of 2011) in order to contend that the first proviso inserted by Finance Act, 2010 is retrospective in nature. Accordingly it was contended that no disallowance u/s 40(a)(ia) is not called for, as the assessee has remitted the TDS amount before the due date for filing return of income. Accordingly the Tribunal deleted the disallowance accepting the contentions of the assessee. 7. We notice that the Hon ble Cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i biotech Laboratories India Ltd Vs. ACIT (36 ITR (T) 88) d. Mahindra and Mahindra ltd Vs. Addl CIT (ITA No.586/Mum/2013) The Ld A.R further submitted that Form 3CL is issued by DSIR and the assessee has got no control over the same. Accordingly he submitted that the order passed by Ld CIT(A) should be upheld. 12. We heard the parties on this issue and perused the record. Identical disallowance made by the AO in AY 2007-08 and 2008-09 has since been deleted by the Tribunal. In AY 2008-09, the assessee has field Form 3CL before the Tribunal and hence the Tribunal has observed that there should not be any bar for the assessee in availing the deduction u/s 35(2AB). However, since the AO has not examined Form 3CL, the Tribunal directed the AO to allow the claim after verifying Form 3CL. 13. From the order passed by Ld CIT(A) for AY 2009-10, we notice that the assessee has furnished Form 3CL dated 07-03-2012 before Ld CIT(A) in AY 2009-10. In any case, in the case laws relied upon by the assessee, furnishing of Form 3CL was held to be not mandatory. Under these set of facts, we are of the view that there is no reason to interfere with the order passed by Ld CIT(A) on this is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ------------------ 36,05,921 ================== However, the AO added a sum of ₹ 41,95,811/- to the total income of the assessee u/s 14A of the Act. 20. In the appellate proceedings, the Ld CIT(A) granted relief in respect of interest paid on ECB Loan and accordingly confirmed the balance amount of addition. Aggrieved, both the parties are in appeal. 21. We heard the parties on this issue. From the Balance sheet, we notice the assessee is having own funds of ₹ 18061.83 lakhs and ₹ 17450.33 lakhs respectively as on 31.3.2008 and 31.3.2009. The total value of investments stands at ₹ 1781.45 lakhs and ₹ 1792.70 lakhs as on 31.3.2008 and 31.3.2009 respectively. Admittedly, the own funds available with the assessee is in far excess of the value of investments. Accordingly the presumption would be that the assessee has used its own funds for making investments as per the decision rendered by Hon ble Bombay High Court in the case of HDFC Bank Ltd (383 ITR 529). Accordingly disallowance of interest expenditure u/r 8D(2)(ii) is not call ..... X X X X Extracts X X X X X X X X Extracts X X X X
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