TaxTMI 
TaxTMI 
2016 (5) TMI 1173
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....se was discussed and assessment was completed at Rs. 91,78,364/- after making addition of Rs. 59,92,020/-. 3. Appeal before ld. CIT(A) brought part relief to the assessee and aggrieved, Revenue is now in appeal before the Tribunal. 4. Ground No.1 is as under :- 1. The Ld.CIT(A) has erred in law and on facts in deleting the disallowance of deduction u/s 36(l)(va) of Rs. 59,784/- without appreciating fact that employee's contribution is not covered u/s 43B but it is covered under the provisions of section 36(l)(va) r.w.s 2(24)(x). 5. At the outset ld. DR submitted that the issue in this ground is squarely covered by the Hon'ble Jurisdictional High Court in the case of CIT vs. Gujarat State Road Transport Corporation (GSRTC) (2014) 366 ITR 170 (Guj) which is held in favour of Revenue. 6. No objection was raised by ld. AR. 7. We have heard the rival contentions and perused the material on record and also gone through the judgment in the case of CIT vs. GSRTC (supra) relied on by the ld. DR. This ground raised by the Revenue is against the action of ld. CIT(A) in deleting the disallowance of deduction u/s 36(1)(va) of the Act of Rs. 59,784/- for employees con....
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....ed. " 8. Respectfully following the above decision of Hon. Jurisdictional High Court we are of the view that ld. Assessing Officer has rightly disallowed the deduction u/s 36(1)(va) of the Act at Rs. 59,784/- in regard to employees contribution deposit beyond due date of payment. Accordingly, this ground of Revenue is allowed. 9. Ground no.2 reads as under :- 2. The Ld.CIT(A) has erred in law and on facts in deleting the disallowance of proportionate interest of Rs. 2,42,500/- 10. During the course of assessment proceedings, ld. Assessing Officer observed that there stood loan and advances to WGF Finances Services Ltd. and India Telecom Ltd. totaling to Rs. 24,25,000/- and there was an interest expenditure debited to profit and loss account at Rs. 3,79,20,116/-. Ld. Assessing Officer was of the view that on one hand assessee is having huge borrowed funds and on the other hand assessee has given loans and advances without any business purposes at Rs. 24,25,000/- and, therefore, disallowed 10% of loans and advances given as proportionate interest at Rs. 24,25,000/-. 11. In appeal before ld. CIT(A), disallowance of Rs. 24,25,000/- was deleted by ld. CIT(A) by foll....
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....addition was accordingly deleted. The learned Counsel for the assessee at the outset submitted that the Tribunal dismissed the departmental appeal on the similar issue vide order dated 12-03-2010 in Para 27 to 30. The learned DR did not dispute this fact. We, therefore, do not find any justification to interfere with the order of the learned CIT(A) because the outstanding balance has been reduced from the earlier years. Since in the earlier year similar disallowance has been deleted, therefore, on the reduced outstanding balance no disallowance could be made. This ground of appeal of the revenue is accordingly dismissed. 15. We further observe that co-ordinate bench dealt this issue in ITA No.1091/Ahd/2005 for Asst. Year 2001-02 and ITA No.4329/Ahd/2007 for Asst. Year 2004-05, wherein there were advances to India Telecom Ltd. at Rs. 1,0,00,000/- and to WGF Financial Services at Rs. 14,75,000/- respectively as on 31.3.2004 and co-ordinate bench dismissed the ground raised by the Revenue by observing as under :- 27. Next ground no. 2 in the appeal of the Revenue relates to disallowance of Rs. 1,78,682/- on account of interest on capital advances. During the course of asse....
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.... the facts of the case. Undisputedly, the ld. CIT(A) relied upon orders of his predecessor for the earlier years. Revenue have not placed before us any material that the said orders relied upon by the ld. CIT(A) have been reversed in further appeal. Even otherwise, the ld. CIT(A) found that advances were not for non-business purposes. In this connection, Hon'ble Apex Court in SA Builders 288 ITR 1 (SC), ITA No.1091/Ahd/2005& ITA No.4329,3451&4258/Ahd/2007 14 have held that the expenditure may not have been incurred under any legal obligation, but yet it is allowable as a business expenditure if it was incurred on grounds of commercial expediency. In the light of view taken in the aforesaid decision by the Hon'ble Apex Court, especially when the Revenue have not placed before us any material contrary to the findings of the ld. CIT(A) that the advances were for business purposes, we do not find any merit in the ground raised by the Revenue. Therefore, ground no.2 in the appeal of the Revenue is dismissed. 16. Respectfully following the decisions of co-ordinate bench, we are of the view that looking to the past history of decisions by the coordinate bench in assessee's own case it ....
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....in percentage terms the shortage is just 0.13% of the total items sold. We are of the considered view that ld. Assessing Officer has made an estimated addition without corroborating the facts with the books of accounts and not pointing out any mistake in the quantitative purchase and sale nor any defect has been pointed out in the manufacturing activities carried on by the assessee and not appreciating the fact that while conducting business of items which are huge in numbers, a minor shortage on account of pilferage, handling, wear and tear etc. cannot be ruled out. Therefore, ld. CIT(A) has rightly deleted the addition and no interference is called for in the order of ld. CIT(A) relating to this ground. This ground of Revenue is dismissed. 24. Ground no.4 of the appeal reads as under :- 4. The Ld.CIT(A) has erred in law and on facts in deleting the disallowance of diesel expenses and trip and bhatta expenses of Rs. 27,64,867 out of Rs. 41,47,300/-. 25. Ld. Assessing Officer while comparing the diesel expenses and trip bhatta expenses to the total revenue on account of transport operation income, observe that percentage of expenditure has sharply increased as compar....
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..... The disallowance effected by the AO was at 10% of total claim, which is on the higher side. The current year operational results being on lower side vis-a-vis low ratio of such expenses to income during the year under consideration, also the claim of the appellant that freight rates, most of which are on rate contract basis cannot be increased instantly commensurate with diesel expenses, cannot be ignored fully. It was also observed that on the similar facts in the judgement of IT AT in ITA No. 2226&2527/Ahd/2007 for A.Y. 2003-04 in the assessee's own case, the relief granted by my predecessor in A.Y. 2003- 04 was confirmed to the extent of 2/3rd of such addition. It is further observed that the addition presently made is also on estimation basis without any finding. In respectful agreement with my learned predecessor and also order of Hon'ble ITAT Bench in the same case, I direct the AO to restrict the disallowance at Rs. 1 3,82,433/- being 1/3rd of disallowance made of Rs. 41.47.300/- and that a relief of Rs. 27,64,8677- being 2/3rd of the disallowance be granted to the appellant, , 27. Aggrieved, Revenue is in appeal before the Tribunal. 28. Ld. DR supported the ....
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....s in the instant case, especially when the assessee did not discharge onus laid down upon them before any of the authorities and even before us. In these circumstances, especially when neither the Id. AR nor Id. DR referred us to any material so as to enable us to take a different view in the matter while undisputedly facts relating to the year under consideration are different from the facts obtaining in the preceding years as noted by the Id CIT (A), we are not inclined to interfere. Thus, ground No.l in the appeal of the assessee & ground No.l in the appeal of the revenue are dismissed." 30. We further observe that co-ordinate bench in ITA No.1091/Ahd/2005 for Asst. Year 2001-02 dealt with the same issue, wherein it has been held as under :- 6. We have duly considered the rival submissions, perused the relevant materials on record and also the documentary evidence adduced by the learned AR in a paper book (supra). (i) Restriction of addition to Rs. 3.55 lakhs on low GP: .... ... We have carefully analyzed the reasons set out by the CIT (A) in restricting the addition to Rs. 3.55 lakhs as against Rs. 6.94 lakhs made by the AO. It was an undisputed fa....
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....ve heard both the parties and gone through the facts of the case. As already mentioned, the onus squarely rested upon the assessee to satisfy the revenue authorities in respect of the purpose for which the expenditure concerned was incurred. In the instant case, the assessee did not produce log book / trip register or any corroborative evidence in support of their claim either before the AO / Id. CIT (A) and even before us while there is no justification for irtionate increase in expenditure vis-a-vis expenditure incurred in the [ceding years. Therefore, the Id. CIT (A), considering the fact that input cost has gone up due to rise in diesel prices and other inflation cost, observed that current year operational results are found to be different from the preceding year. Taking into considering the fact that most of the freight rates were on rate contract basis which could not be increased commensurate with diesel expenses, the Id. CIT (A) restricted the disallowance to the l/3rd of the total disallowance of Rs. 56.52 lacs. Though the Id. AR relied upon a decision in the case of 77 TTJ (Ahd) TM 490, it has not been demonstrated as to how the facts of the cited case were parallel to t....