TaxTMI 
TaxTMI 
TaxTMI 
2015 (6) TMI 1
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....re, the same are disposed of by way of this common order for the sake of convenience. 2. The only issue raised by assessee in its appeals which also corresponds to the common issue raised in the departmental appeals relate to disallowance of expenditure u/s 14A of the Act. 3. Briefly the facts, as taken from the appeal folder relating to AY 2008-09 are, assessee a company is engaged in the business of manufacture of ferro silicon. Assessee filed its return of income for AY under dispute on 20/09/2008 declaring loss of Rs. 4,62,38,541. In course of assessment proceeding, AO on verifying the balance sheet noticed that assessee company has borrowed funds to the tune of Rs. 10,10,79,634. He also noticed that assessee has invested in shares of....
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....istrative expenses @ 0.5% of total investment. Similar view was also taken by ld. CIT(A) for AY 2010-11. Being aggrieved of the appeal orders passed by ld. CIT(A), both assessee and revenue are before us. 5. While the department has objected to the relief granted by ld. CIT(A), assessee in course of hearing requested for admission of additional ground raising the issue that no disallowance u/s 14A can be made as assessee has not earned/claimed any exempt income in the relevant AY. 6. Ld. AR arguing on the issue raised in additional ground submitted before us, in none of the assessment years under consideration assessee has earned/claimed any exempt income, hence, the provisions of section 14A of the Act will not apply. In support of such ....
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....me in the assessment year under consideration. However, as it appears, ld. CIT(A) has not at all gone into that issue. Therefore, since the issue was raised before ld. CIT(A) by assessee and as stated before us inadvertently could not be raised in grounds of appeal filed along with Memorandum of Appeal and further, since the issue raised goes to the root of the matter and can be decided on the basis of facts and materials available on record, we are inclined to admit the additional ground raised by assessee. 9. As is evident from the said additional ground, the specific contention of assessee is during the relevant AYs assessee has not claimed/earned any income, which is exempt u/s 10(34), hence, no disallowance can be made by invoking sec....
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....cision of Mumbai Tribunal cannot be said to be having any precedentiary value in view of the decisions of the Hon'ble High Courts referred to in the said order. Therefore, the principle which emerges from the decisions of the Hon'ble High Courts referred to above, if in a particular assessment year, assessee has not earned any exempt income no disallowance u/s 14A can be made. In the facts of the present case, assessee has taken a specific plea that it has not claimed/earned any income which is exempt under the Act. On perusal of the relevant assessment orders it is noticed that AO has only referred to investments made by assessee and not to any exempt income earned by assessee while working out disallowance u/s 14A. Even though, assessee h....
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....ed as income as per section 2(24)(x) of the Act. AO further observed that employees contribution would not be covered by section 43B of the Act. Being aggrieved of such disallowance, assessee preferred appeal before ld. CIT(A). 13. Ld. CIT(A) after considering the submissions of assessee in the light of the decision of the Hon'ble Supreme Court in case of CIT Vs. Alom Extrusions Ltd., 319 ITR 366 and some other decisions of different High Courts held that even where the employees contribution to ESI and PF were not paid within the due date as per section 36(1)(va), but, were paid before the due date of filing of return u/s 139(1), the same is allowable as expenditure u/s 43B of the Act. 14. The ld. DR submitted before us, the expenditure ....
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....sions placed before us by the parties. There is no dispute as far as the factual aspects are concerned. It is a fact on record that employees contribution to PF & ESI have not been remitted to the Govt. account/appropriate fund within the due date as per Explanation to section 36(1)(va). At the same time, it is also not disputed that assessee has remitted the employees contribution to PF & ESI before the due date of filing of return u/s 139(1) of the Act. Thus, the only issue to be decided whether such delayed payment of employee's contribution to PF & ESI is an allowable deduction u/s 43B. As can be seen, the Hon'ble Gujarat High Court in case of CIT Vs. Gujarat State Road Transport Corporation (supra) has decided the issue against assesse....