TMI Blog2019 (6) TMI 1626X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein it was held that in the absence of any tax free income, the corresponding expenditure could not be worked out for making disallowance u/s. 14A - Hon ble Delhi High Court in the case of Chemnivest vs. Commissioner of Income Tax-Vl, [ 2015 (9) TMI 238 - DELHI HIGH COURT] held that section 14A will not apply if no exempt income is received during the relevant previous year. Therefore, in view of above, the disallowance made u/s 14A of the Act r.w.r. 8D is not sustainable. Disallowance u/s 36(1)(va) - assessee s failure to deposit employees contribution towards statutory ESI and PF within the due date - HELD THAT:- The issue involved is no longer reintegra. If the assessee pays PF and ESI contribution within the time of filing return of income under section 139(1) of the Act, it would be sufficient compliance and no disallowance is attracted. - ITA No. 1794/Kol/2018 - - - Dated:- 28-6-2019 - SHRI S.S. GODARA, JM AND DR. A.L. SAINI, AM For the Assessee : Shri Shankar Halder, JCIT, Sr. DR For the Respondent :Shri Nirav Seth, FCA ORDER Per Dr. A. L. Saini: The captioned appeal filed by the Revenue, pertaining to assessment year 2012-13, is di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing for capital reserve amounting to ₹ 605,23,24,263/- (earlier year) was on account of, restructuring of business of the assessee-company by way of slump sale of its wholesale and retail business to TPG Wholesale Pvt. Ltd. and Airplaza Retail Holdings Pvt. Ltd. respectively. The assessee-company has also, during the preceding F.Y. 2010-11, had voluntarily added the surplus on sale of business in the computation of income under normal provision only. But, the amount of such surplus was also added to the book profit u/s. 115JBof the Act by the AO while passing the order. During the year in question, the assessee-company has given the break-up of capital reserve which is worked out as under :- (I) On account of forfeiture at shares : Rs, 97,75,000/- (II) Differential amtrece on account of sale of business, slump sale: Rs,2,31.26,250/- Total: ₹ 3.29,01.250/- The assessee-company submitted before the AO that out of the differential amount of ₹ 2,31,26,250/-, the assessee-company has to repay, ₹ 2,57,26,012/- in the subsequent year, i.e., F.Y. 2013-14 and it was debitedto capital reserve in the said year. The assessee has also submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts of FY 2013-14 (AY 2014-15) wherein the Capital Reserve account was debited for ₹ 2,57,26,012/-. It was also submitted that credit to Capital Reserve account represent differential receipts, pursuant to business, restructuring arrangement done by the appellant company in FY 2010- 11( A.Y 2011-12). Further, this debit, of ₹ 2,57,26,012/- in subsequent year i.e., FY 2013-14 (AY 2014-15) also represent similar nature of transaction and debited to Capital Reserve. It was submitted that in AY 2014-15, the amount debited to CapitalReserve of ₹ 2,57,26,012/- was not claimed in computation of income. On perusal of observations of the AO and submission of the AR, it is seen that there is no dispute to the fact that the appellant company underwent a major restructuring in FY 2010-11 (AY 2011-12) whereby the appellant company credited, ₹ 605.23 Crores to its capital reserve account in the said year. The note referred to in Schedule No.20 read with Auditor's Comments in Page No.109 of Paper Book / filed by the AR of the assessee, clearly establishes this fact. The said year, the Company bifurcated, its assets and liabilities as on appointed date betweenthe ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not bring to our notice any case laws to controvert the findings of the ld. CIT(A). In the aforesaid facts and circumstances of the case, we hold that CIT(A) was justified in deleting the addition of ₹ 97,75,000/-.That being so, we decline to interfere with the order of Id. C.I T.(A) deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed. 7. Ground No. 2 raised by the Revenue relates to interest on unsecured loan of ₹ 27,34,728/- disallowed by Assessing Officer. 8. Brief facts qua the issue are that this ground consists of two parts. One with respect to interest on Unsecured loan of ₹ 27,34,728/- and other being interest on TDS and sales Tax of ₹ 5,40,581/-. With respect to First part with respect to interest on unsecured loan of ₹ 27,34,728/-, the submission of the appellant during the course of appellate proceedings is reproduced below: In this connection, it is submitted that disallowed amount of ₹ 32,75,309/- represents Interest no unsecured loans of ₹ 27,34,728/- and interest on other TDS Sales Tax of ₹ 5,40,581/- respectively as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer has not given any adverse inference with respect to the genuineness of this transaction or any other findings. With respect to this, the AR of the assessee has submitted that the said transaction was duly reported in Annexure - G of Tax Audit Report filed by the assessee during the course of assessment proceedings. The said annexure clearly shows the amount of loan taken by the assessee during the instant year, maximum amount outstanding and whether this amount was squared up during the year or not. Apart from this, it also gives information about the name of the lending company, its address and PAN Number: The aforesaid details contained in Annexure-G of Tax Audit Report for the instant year (as mentioned above) are quite sufficient to corroborate the transaction done by the appellant company with the aforesaid loan creditors. As these details were available before the Assessing Officer at the stage of assessment hearing and he has not given any adverse finding or drawn any adverse inference with respect to the genuineness of these transactions, I am of the opinion that the AO has sufficient material / documentary evidence available to corroborate the transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al No. 830 of 1979 titled Saraya Sugar Mills (P.) Ltd. v. CIT decided on 29-2- 1996. In that view of the matter, the appeal is allowed and question Nos. 1 and 2 we answered in favour of the assessee and against the revenue. 10. In view of the above judgment, there remains no doubt that the interest expense on the delayed payment of service tax is allowable deduction. On the basis of above submissions, it is submitted that the Ld. Assessing Officer has erred in making disallowance of interest paid of ₹ 32,75,309/- (₹ 27,34,728/- being. Interest on Unsecured Loans and ₹ 5,40,581/- being interest on Others TDS and Sales Tax). Hence, ld CIT(A) has rightly deleted the addition of ₹ 27,34,728/- ( interest on unsecured loan ) and ₹ 5,40,581/-( interest on TDS and sales Tax). I have carefully gone through the submissions, details and documents and the judgments relied upon. I am of the view that the A.O. has erred in making disallowance of ₹ 27,34,728/- on account of Interest paid. Hence, the A.O. is directed to delete the disallowance made for the payment of interest on unsecured loan of ₹ 27,34,728/- and interest on TDS and Sales tax of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s prescribed under Employees Provident Fund ..Miscellaneous Provisions Act, 1952 and Employees State Insurance Act, 1948 respectively beyond the dates, prescribed by relevant statutes, however all such payments were duly made within the due date of filing of income tax return i.e., within 28.09.2012. It is further submitted that if such contribution are paid after the due date prescribed by relevant, statutes but before the due date of filing the return, the same is allowable as held in following judgments: Kolkata I.T.A.T. in assessee's own case (order passed on 19.01.2012) held that if the payment is made within the due date of filling of return of income u/ s 139(1) of the Act then addition u/ s 36(1)(va) read with sec 2(24)(x) of the Act should be deleted in full. Kolkata I. T.A. T. in REI Agro Limited (order passed on 14/05/2013) following the decision of Hon'ble jurisdictional High Court in the case of M/s Vijay Shree Limited vide ITAT No-:245 of 2011 in GA No.2607 of 2011 dated 7th September, 2011 allow the claim of assessee in deleting the addition as made by AO in addition u/s 36(1)(va) read with sec 2(24)(x) of the Act. Bombay High Court in Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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