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of <h1>Appeal partially allowed for tax disallowances with grace period for PF/ESIC payments.</h1> <h3>Zodiac Clothing Company Ltd. Versus The ACIT</h3> Zodiac Clothing Company Ltd. Versus The ACIT - TMI Issues: Appeal against the order of Ld. CIT(A)-13, Mumbai for assessment year 2006-07 regarding disallowance under section 14A of the Income Tax Act, disallowance of belated payments made within grace period for PF and ESIC, and interest charged under sections 234C and 220(2) of the Income Tax Act, 1961.Analysis:1. Disallowance under Section 14A of the Income Tax Act:The appellant contested the disallowance directed by the Ld. CIT(A) under section 14A. The Tribunal referred to a previous decision related to assessment year 2005-06 where it was decided to restore the issue to the Assessing Officer for fresh examination. The Tribunal directed the Assessing Officer to determine if there was any exempt income and calculate a reasonable amount for disallowance under section 14A. The Tribunal allowed this ground in favor of the appellant, following the facts and law. The issue was considered as allowed, and the appeal was partly allowed for statistical purposes.2. Disallowance of Belated Payments within Grace Period for PF and ESIC:The issue of disallowance of employees' contributions towards Provident Fund and ESIC paid within the grace period was raised. The Tribunal noted that the Ld. CIT(A) confirmed the disallowance but did not allow the amount paid within the grace period. Citing a judgment by the Jurisdictional High Court, the Tribunal directed the Assessing Officer to permit the amount paid within the grace period. Consequently, the ground was considered as allowed, and the appeal was partly allowed for statistical purposes.3. Interest Charged under Sections 234C and 220(2) of the Income Tax Act, 1961:The appellant contested the interest charged under sections 234C and 220(2) of the Income Tax Act, claiming it was a liability denied by them. However, the Tribunal noted that Ground No.6 was not pressed by the appellant, and hence, it was dismissed. The appeal was considered to be partly allowed for statistical purposes.In conclusion, the Tribunal allowed the appeal partly for statistical purposes, directing the Assessing Officer to re-examine the disallowances under section 14A and to permit the belated payments made within the grace period for PF and ESIC. The interest charged issue was dismissed as it was not pressed by the appellant.
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