Tribunal upholds CIT(A) decisions, allowing 10AA deduction for export-related interest, and deleting disallowance under 40a(ia) for ESIC & PF.

The Tribunal upheld the decisions of the ld. CIT(A) for both issues raised by the revenue, dismissing the appeal and maintaining the orders in favor of the assessee. The deduction under section 10AA for interest on FOR and sundry balance written back was allowed as it was directly related to export business activities. Additionally, the deletion of disallowance under section 40a(ia) for ESIC & PF contributions paid beyond the due date was upheld based on precedents favoring the assessee.

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Issues:
1. Allowance of deduction under section 10AA for interest on FOR and sundry balance written back.
2. Allowance of deduction for Employees' contribution to PF and ESIC paid beyond due dates.

Analysis:
Issue 1:
The appeal by the revenue challenges the order of the ld. Commissioner of Income-tax (Appeals) regarding the deduction under section 10AA for interest on FOR and sundry balance written back for Assessment Year 2014-15. The revenue contends that the deduction should be exclusively related or derived from the business activity of export. The Tribunal considered previous decisions for Assessment Years 2010-11, 2011-12, and 2013-14 where similar grounds were raised. In those cases, the Tribunal upheld the assessee's claim for deduction under section 10AA. The Tribunal noted that the sundry credit balance written back and interest income were directly related to the export business activities of the assessee. Therefore, the Tribunal dismissed ground no.1 of the appeal raised by the revenue, as it was covered in favor of the assessee by previous decisions and the ld. CIT(A) followed the decision of Assessment Year 2011-12.

Issue 2:
The second ground of appeal relates to the deletion of disallowance under section 40a(ia) for ESIC & PF contribution paid beyond the due date. The Tribunal observed that similar grounds were allowed in favor of the assessee in previous cases by following the decisions of the Hon'ble jurisdictional High Court and the co-ordinate bench of the Tribunal. The Tribunal found no merit in the revenue's ground of appeal based on the precedents and dismissed the appeal. The decision was in line with the cases of Hindustan Organics Chemicals Ltd. and Ghatge Patil Transporters Ltd., where employee contributions to PF were allowed as deductions if paid by the employer before the due date of filing income.

In conclusion, the Tribunal upheld the decisions of the ld. CIT(A) for both issues raised by the revenue, thereby dismissing the appeal and maintaining the orders in favor of the assessee.

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