TMI Blog2022 (8) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... ESI dues - HELD THAT:- We find that the ld. CIT(A) has rightly followed the decision in the case of CIT v. Industrial Security Intelligence India Pvt. Ltd. [ 2015 (7) TMI 1063 - MADRAS HIGH COURT] as well as decision of CIT v. Alom Extrusions Ltd. [ 2009 (11) TMI 27 - SUPREME COURT] in directing the Assessing Officer to allow the deduction to the extent payments are made within due date of filing of return of income. Thus, the ground raised by the Revenue is dismissed. - I.T.A. No. 1460/Chny/2019 - - - Dated:- 29-7-2022 - Shri V. Durga Rao , Judicial Member And Shri G. Manjunatha , Accountant Member Appellant by : Shri D. Hema Bhupal , JCIT Respondent by : Shri G. Baskar , Advocate ORDER PER V. DURGA RAO , JUDICIAL MEMBER : This appeal filed by the Revenue is directed against the order of the ld. Commissioner of Income Tax (Appeals) 1, Chennai, dated 31.01.2019 relevant to the assessment year 2015-16. 2. The first ground raised in the appeal of the assessee relates to deleting the disallowance of guarantee fee claimed based on fresh evidence without affording an opportunity to the Assessing Officer under Rule 46A of the Income Tax Rules. 2.1 In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Rule 46A of the Income Tax Rules. 4. On the other hand, the ld. Counsel for the assessee supported the order of the ld. CIT(A). 5. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. The assessee has claimed a sum of ₹.4,71,52,666/- as guarantee fees paid to its holding company M/s. Daechang Seat Co. Ltd., Korea at the rate of 1.4% of loan amount received. On verification of the details furnished by the assessee, the Assessing Officer has observed the assessee has claimed certain amounts under the head Guarantee Fees on loans already closed during the earlier previous year or on those loans not pertaining to the current year. The total amount of such excess Guarantee Fees paid over and above the proportion calculated as per the Guarantee Agreement is a sum of ₹.2,20,38,517/- as per assessee s own admission vide letter dated 22.12.2017. Accordingly, the Assessing Officer disallowed the same and brought to tax. On appeal, after considering the evidences furnished by the assessee regarding the incurring of expenses and the details regarding the deduction of tax on the said expenses, the ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant as not claimed guarantee fee twice. Agreement entered is for Calendar Year: The appellant company has remitted guarantee fee to the company incorporated in Korea, M/s. Daechang Seat Co. Ltd. The Appellant Company and M/s. Daechang Seat Co. Ltd has agreed for a contracting period as calendar year since the calendar year is the financial year for the Korean Company. The Korean companies prepare the accounts for the calendar year only. By relying on the ratio of above submissions, it is therefore most humbly prayed that this learned Commissioner of Income Tax (Appeals) may be pleased to delete the addition on account of excess claim of Guarantee Fee allow the guarantee fee in the Financial Year 2014-15 itself . The Appellant prayed that the addition on account of excess claim of guarantee fee should be deleted and the guarantee fee claimed by the appellant in the F.Y. 2014-15 itself should be allowed. 4A(1) CIT(A) s inference and decision: The submissions of the appellant were considered vis-a-vis the findings of the Assessing Officer. The appellant's claim of guarantee fee was considered to be an excessive claim by the A.O. It was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details of tax deducted on guarantee fee and also substantiate that the assessee had not claimed the guarantee fees twice as stated by the Assessing Officer. The assessee by following the directions given by the ld. CIT(A) filed the details in respect of tax deducted on guarantee fee, which was already filed before the Assessing Officer. The Assessing Officer has extracted half portion in one page and half portion in another page and without considering the details, addition was made. The action of the ld. CIT(A) in directing the assessee to produce the details is covered by Rule 46A (4) of the Income Tax Rules, 1962. The relevant clause (4) is extracted for ready reference: (4) Nothing contained in this rule shall affect the power of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the Assessing Officer) under clause (a) of sub-section (1) of section 251 or the imposition of penalty under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployee contributions of EPF and ESI as it is the income of the assessee in view of the provisions of section 2(24)(x) of the Act read with section 36(1)(va) of the Act. Before the ld. CIT(A), the assessee has submitted that since the entire amount has been remitted before the due date for filing of return of income, the same should be allowed as deduction under section 43B of the Act. Accordingly, by following the decision of the Hon ble Jurisdictional High Court in the case of CIT v. Industrial Security Intelligence India Pvt. Ltd. (supra) as well as decision of the Hon ble Supreme Court in the case of CIT v. Alom Extrusions Ltd. 319 ITR 306 (SC), the ld. CIT(A) directed the Assessing Officer to allow deduction to the extent payments are made within due date of filing of return of income. 10. So far as the case law relied on by the ld. DR in WP No. 5264 of 2018 dated 23.10.2018 is concerned, we find that it is a Single Judge decision, which was subsequently, vide order dated 09.01.2019 in W.P. No. 2854 of 2018 CMP 23727 of 2018 in the case of M/s. Unifac Management Services (India) Pvt. Ltd. v. DCIT, the assessee was permitted to withdraw the writ petition namely W.P. No. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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