TaxTMI 
TaxTMI 
2013 (8) TMI 938
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...... The learned AO observed that annexure attached with audit report showed that the payment towards contribution of employees' P. F. of Rs. 20,163/- for the month of April, 2005 and ESI of Rs. 10,921/- for the month of April,2005 and November, 2005 respectively were not made within the due date as per section 36(1) (va) of the Act. The delayed payment has not been accepted by the learned AO. The learned AO gave reasonable opportunity of being heard on this issue which was replied by the assessee vide his letter dated 23-04-2008. The learned AO by applying section 2 (24) and 36(1) (va) of the Act treated the assessee's income and addition of Rs. 42,013/- was made in the income of the assessee. The assessee being aggrieved by the order of the learned AO carried the matter in appeal before the learned CIT(A) who had confirmed the addition by observing as under in Para 3.3 of his order:- "3.3 I have considered the facts of the case, assessment order and appellant's submission. A. O. made addition of employee's contribution amounting to Rs. 42013 to P. F. and ESI not paid within due dates prescribed in PF and ESI Act. Employee's contribution is allowable u/s 36(1) (va). The amendment i....
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....isallowance of employee's contribution; the same cannot be made redundant by linking it with sec. 43B. In view of this it is clear that all the decisions interpreting the applicability of sec. 43B where employee's contribution is also loosely mentioned, do not apply to employee's contribution covered u/s 36(1) (va). It is true that there are conflicting decisions wherein employee's contribution is also clubbed with the employer's contribution. However there is no jurisdictional high court decision on this issue after amendment to section 43 B. On the issue of Rule of interpretation of statute, there are several decisions holding the view that there should be harmonious construction while interpreting statute. Some of these are - 1- Assam Co. Ltd. Vs Stat of Assam and others, 248 ITR 567(SC) 2- LIC of India vs CIT, 219 ITR 410 (SC) 3- CIT vs S E Upper Sileru, 152 ITR 752 (AP) If the above rational and logic is followed, there is no confusion over applicability of the correct provision to employee's contribution. In view of the clear provisions and legislative intent, the employee's contribution is allowable only if the same is paid within due dates under PF. Act or other relevan....
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....ance of Rs. 2,65,000/- on account of authorized share capital. The learned AO observed that the assessee had paid Rs. 2,05,000/- as ROC fees and Rs. 60,000/- being stamp charges respectively towards Form No.5 for increasing authorized share capital of Rs. 3 Crores to Rs. 7 Crores. The AO found this expenditure as capital in nature. The learned AO gave reasonable opportunity of being heard on this issue to the assessee. After relying upon various case laws he made addition of Rs. 2,65,000/- by holding it as capital expenditure. Being aggrieved, the assessee carried the matter in appeal before the learned CIT(A) who has confirmed the addition by observing as under in Para 4.3 of his order:- "4.3 I have considered the facts of the case, assessment order and appellant's submission. The expenses relating to increase in capital are not allowable since these are capital in nature. This is as per various Supreme Court decisions, some of which are referred by the assessing officer. However, appellant submitted that Supreme Court decision in the case of GIC allows expenses for increase in capital if the same relates to issue of bonus share. The said decision was referred and discussed with ....
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....ppeal is against confirmation of disallowance of Rs. 19,16,049/- out of business development expenses. The AO observed that the assessee had debited Rs. 19,16,049/- under the head business development expenses in the profit & loss account. The learned AO gave reasonable opportunity of being heard to the assessee and considered the reply furnished by the assessee on 05-12-2008. The learned AO found that the assessee had failed to furnish the details of expenses and its relation with the business activities. The assessee did not furnish any details of the training activities at London, for whom it was availing such facilities was also not furnished. Moreover, the purpose of training and its nexus of business of the assessee company were not established. The expenses were incurred by the director which was not related to earning of income. Thus, he added Rs. 19,16,049/- to the income of the assessee. Aggrieved by the order of the learned AO, the assessee carried the matter in appeal before the learned CIT(A) who confirmed the addition by observing as under in Para 5.3 of his order:- "5.3 I have considered the facts of the case, assessment order and appellant's submission. Appellant d....
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....ny. As per condition, he had served the company without any remuneration for the year 2008-09. The company had benefited from this expense which was incurred during his stay in UK. He further relied in the case of CIT Vs U. P. Asbestos Ltd. wherein it was held by the Hon'ble Allahabad High Court that in public limited company being a legal entity, the company can take a decision to secure its interest by sending any one on contract basis for higher education and training to abroad and after completion of training return back to the country and the person may join the company itself. There should be dividing line between personal interest and the interest of the assessee company. If the expenditure is incurred on a son of the director on contractual basis that after completing training he will join the company and give benefit of training and higher education, thus it is allowable expenditure. He further relied in the case of CIT & Anr. Vs RAS Information Technologies (P) Ltd., (Kar), 238 CTR 76 wherein expenditure on foreign expenses of the managing director's son held allowable. 13. At the outset, the learned DR relied upon the order of the learned CIT(A) and prayed to confirm th....