TMI Blog2022 (1) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... with the assessee during the year under consideration. In view, thereof, we set aside the order of the Ld. CIT (Appeals) on this issue and remand the same back to the file of the Assessing Officer for adjudication after complying with the principles of natural justice as indicated hereinabove. Thus in the same parity of reasoning under the same set of facts and circumstances as also admitted by the parties herein, we set-aside the order of the ld. CIT(A) on this issue and remand the same back to the file of the AO for adjudication after complying with the principles of natural justice. Thus, the issue raised in the regular grounds of appeal related to the disallowance u/s. 14 is allowed for statistical purposes. Deduction paid toward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A.O. (and Ld. CIT(A)) has erred in not considering the fact that assessee has Huge Reserves and Interest free funds. 2.2) The Ld. A.O. (and Ld. CIT(A)) has erred in not considering the fact that there is huge Interest Income which should be set off against Interest income while applying Rule 8D. 3. The appellant craves its right to add to or alter the Grounds of Appeal at any time before or during the course of hearing of the case. 2. The brief facts in this case are that the assessee company is a domestic private limited company engaged in the business of manufacturing of Motor Vehicle Parts and Electricity Generation through Windmills. The assessee had filed its return of income for A.Y. 2014-15 on 27.11.2014 declaring to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee's own case for A.Y. 2013-14 in ITA No. 360/PUN/2018 dated 20.05.2021. The ld. DR fairly conceded the submissions of the assessee. 6. In the above referred decision, the facts were as follows: 4. The brief facts pertaining to this issue are that the assessee has made huge investment to the tune of ₹ 15.30 Crores as against the share capital and reserves of ₹ 37.11 Crores as shown in the Balance Sheet. That however as evident from the order of the Assessing Officer vide Para 4.2 and order of the Ld. CIT(Appeals) vide para 5.1 of their respective orders, the assessee in this case was unable to establish through evidences and relevant documents that the interest free funds have been only utilized for making invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have an opportunity to examine the interest free funds available with the assessee via-a-vis the investment made during the relevant year under consideration. The case laws relied upon by the assessee in its own case by the Co-ordinate Bench of the Tribunal (supra.) is substantially distinguishable on facts for the reason that in this relevant year, factually it was not established by the assessee and neither therefore, it was examined by the Sub ordinate Authorities that investments were made by the assessee in the year under consideration only from reserves and interest free funds available with the assessee. That further, there is an observation by the Ld. CIT(Appeals) that investments were ITA No. 360/PUN/2018 A.Y. 2013-14 directly m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Education Cess paid by the assessee available with the respondent revenue which does not require any further examination of facts and prayed to allow the additional ground. Further, he submitted that this Tribunal taking support from the decision of Hon'ble High Court of Bombay in the case of Sesa Goa Ltd. reported in 423 ITR 426 directed the AO to allow deduction paid towards Education Cess. 10. After hearing both the parties, we note that the assessee paid Education Cess while computing the taxable income under normal provision of the I.T. Act. The Hon'ble High Court of Bombay in the case of Sesa Goa Ltd. (supra) was pleased to hold that the Education Cess is an allowable expenditure as per the provision of the I.T. Act. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the income tax and fringe benefit tax, therefore, such 'cess' is to be construed as tax . However, the Hon'ble Bombay High Court held that there is no scope for such implications when construing a taxing statute. Even though, cess may be collected as a part of income tax, that does not render such cess either rate or tax, which cannot be deducted in terms of the provisions in Section 40(a)(ii) of the Act. The mode of collection is really not determinative in such matter. Therefore, it was held that amount cess paid is deductable from total income of the assessee. 11. That therefore, from the legal perspective, the issue of 'education cess' is an allowable expenditure as per provisions of Section 40(a) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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