2018 (7) TMI 1685 - AT - Income Tax

Appellate Tribunal upholds deletion of additions under Income Tax Act, dismisses Revenue's appeals

The Appellate Tribunal dismissed the Revenue's appeals for A.Y 2013-14 and 2014-15, upholding the deletion of additions made under sections 14A, 36(1)(va) ... Addition u/s 14A r.w.r. 8D - Held that:- Admittedly, there are no fresh investments which have been made during the year and all the investments have been carried over from the previous years and in the previous years, the Coordinate Bench has deleted the disallowance made under section 14A of the Act. In light of above, respectively following the decision of the Co-ordinate Bench referred in assessee’s own case, the addition made by the AO under section 14A is hereby deleted and the ground taken by the Revenue is hereby dismissed. Addition on account of unverifiable expenses - Held that:- Following the decision of the Co-ordinate Bench in assessee’s own case for AY 2010-11 and 2011-12, he has deleted the said disallowance made by the Assessing Officer. No infirmity in the said findings of the ld. CIT(A) hence the same is confirmed and ground taken by the Revenue is hereby dismissed. Addition towards the late deposit of contribution to PF and ESI - Held that:- CIT(A) has returned a finding that the payments have been made before due date of filing of the return of income and following the decision of Hon’ble Rajasthan High Court in case of CIT vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. (2014 (8) TMI 677 - RAJASTHAN HIGH COURT) and CIT vs. State Bank of Bikaner and Jaipur [2014 (5) TMI 222 - RAJASTHAN HIGH COURT], he has correctly directed the deletion of said disallowance made by the Assessing Officer. Issues:1. Deletion of addition made under section 14A r.w.r. 8D of the I.T. Rule, 1962.2. Deletion of addition of unverifiable expenses.3. Deletion of addition made under section 36(1)(va) of the Act (i.e. PF addition).Analysis:Issue 1: Deletion of addition made under section 14A r.w.r. 8D of the I.T. Rule, 1962In the case for A.Y 2013-14, the Revenue challenged the deletion of addition made by the AO under section 14A r.w.r. 8D of the I.T. Rule. The Appellate Tribunal noted that there were no fresh investments during the year and all investments were carried forward from previous years. The Tribunal referred to past decisions where similar issues were decided in favor of the assessee. The Tribunal followed the precedent set by the Coordinate Bench and deleted the addition made under section 14A, dismissing the Revenue's appeal.Issue 2: Deletion of addition of unverifiable expensesThe Revenue challenged the deletion of addition of unverifiable expenses in the same case for A.Y 2013-14. The Appellate Tribunal upheld the decision of the ld. CIT(A) who found that the AO had subjectively made an adhoc disallowance without specific defects or instances pointed out in the audit. The Tribunal confirmed the deletion of the disallowance based on the findings of the Co-ordinate Bench in earlier cases, dismissing the Revenue's appeal.Issue 3: Deletion of addition made under section 36(1)(va) of the Act (i.e. PF addition)Regarding the deletion of addition made under section 36(1)(va) of the Act for A.Y 2013-14, the Appellate Tribunal upheld the decision of the ld. CIT(A) who found that the payments were made before the due date of filing the return of income. Citing decisions of the Hon'ble Rajasthan High Court, the Tribunal confirmed the deletion of the disallowance, dismissing the Revenue's appeal.In the case for A.Y 2014-15, the issues were identical to those in A.Y 2013-14. The Tribunal noted that the facts and circumstances were the same, and therefore, the findings and directions from the previous case applied. Consequently, the appeal of the Revenue for A.Y 2014-15 was also dismissed.In conclusion, both appeals of the Revenue were dismissed by the Appellate Tribunal, upholding the decisions of the ld. CIT(A) in deleting the additions made under various sections of the Income Tax Act.