TaxTMI 
TaxTMI 
2011 (11) TMI 745
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the AO as so made in the A.Y. 2004-05. 6. On an appeal, ld. CIT(A) allowed the assessee's claim in the light of the finding of his predecessor on identical issue in the previous assessment year. The ld. CIT(A) found himself in agreement with his predecessor as he found that the property in question was mutated in the assessee's name by Municipal Corporation of Delhi and house tax was being regularly paid and the assessee was using the said premises for its business purposes. The ld. CIT(A) has applied the ratio of decision of Hon'ble Supreme Court in the case of Mysore Minerals reported in 239 ITR 775 (SC). 7. Being aggrieved, the revenue is in appeal before us. 8. In the case of hearing of this appeal, it was pointed out by the ld. Counsel for the assessee that ld. CIT(A)'s order passed in A.Y. 2004-05 has been upheld by the Income Tax Appellate Tribunal, Delhi Bench 'C' vide order dated 29.04.2011 by holding and observing as under: - 35. "We have heard both the parties. There is no dispute about the fact that assessee had purchased the property in the financial year 1999-2000 and was occupied by the assessee. The assessee had been paying house tax in its own name. The Asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....und no. 2 raised by the revenue is rejected. 10. Ground no. 3 is directed against CIT(A)'s order in deleting the addition of Rs. 10,25,151/- on account of foreign traveling expenditure. 11. It has been stated by the AO that during A.Y. 2002-03, 2003-04 & 2004-05, the expenditure in respect of attending meeting of Global Alliance for Sugar Trade & Reform & Liberalization was disallowed. It was submitted by the assessee that assessee company's Committee Members/Directors were regularly attending Doha meeting of WTO and that the meeting were attended to establish assessee's business connection and relation with buyers and sellers. However, in view of the reasons given by the AO in the assessee's case in A.Y. 2002-03, 2003-04 & 2004-05, the foreign traveling expenditure amounting to Rs. 10,25,151/- was disallowed by the AO. 12. On an appeal, ld. CIT(A) allowed the assessee's claim after finding that attending meeting by the assessee's Directors/Members were for the business purposes of the assessee, and after following the Tribunal's order in assessee's own case in the A.Y. 2003-04. 13. We have heard both the parties and perused the material on record. 14. From the AO's order, it ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... contributions of fixed on some definite basis by reference to the income chargeable under the head "Salaries" or to the contributions or to the number of members of the fund." Reading the aforesaid section it is clear that to claim deduction by way of contribution to a recognized provident fund, it has to be demonstrated that the contribution is towards a recognized provident fund. The phrase "Recognized Provident Fund" is defined in sec. 2(38) of the Act. As per the definition it means a provident fund, which has been and continues to be recognized by the Chief Commissioner or Commissioner in accordance with rules contained in Part A of the Fourth Schedule, and includes a provident fund established under a scheme framed under the Employees' Provident Funds Act, 1952. Since as per the letter issued by CIT, Delhi-III dated 28.05.1976 the provident fund is considered as fund to which Provident Fund Act, 1925/1952 applies, it amounts to a "Recognized provident fund" within the meaning of sec. 2(38) of the Act and hence in terms of sec. 36(1)(iv) the contribution to "recognized provident fund" is allowable as such. Since there is no dispute that the amount was paid within the due d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nst Rs. 10 lakh disallowed by the AO. The working of Rs. 6,49,336/- being the amount of disallowance sustain by the ld. CIT(A) is as under: - "On a perusal of the details of the above expenses and nature of functions performed by the personnel, I find that the administrative expenses would mostly relate to the carrying on of the normal & primary business activities of the appellant. However, even the appellant has admitted vide submission dated 08.10.10 to the fact of part of such expenses having been incurred to earning of exempt income. In fact the appellant has also provided it's own working of such expenses related to Head office at Ansal Plaza, Delhi only, as investment in tax exempt instruments are taken only at Head office and not at appellant's office at Mumbai, or Port offices at Chennai, Kolkata or kandala, which can be attributed to earning of exempt income. The contention of the appellant that expenses at the Port offices cannot be proximately related to their investment decisions which are made at Head Office is reasonable and therefore, acceptable. Accordingly, only such of the administrative expenses which are made at Head Office and which can be reasonably corelat....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... out to Rs. 96,920/- is also made. Further, out of the total administrative expenses as discussed in preceding para for Rs. 2,21,59,967/- an amount of 2% thereof (the appellant ahs in its submission dated 08.10.10 has allocated 1% of such expenses) is reasonably attributed to earning of exempted income. This works out to Rs. 4,43,199/- which is disallowed u/s 14A of the I.T. Act. Thus, the total disallowance u/s 14A of the I.T. Act and as discussed above would work out to Rs. 6,49,336/- (Rs. 1,09,217 + Rs. 96,920 + Rs. 4,43,199) Apart from this disallowance which is calculated and confirmed above Rs. 6,49,336/-, the disallowance of Rs. 10,00,000/- made by the AO on this issue in his order is directed to be deleted." 26. Hence, the revenue is in appeal against the ld. CIT(A)'s order in sustaining the disallowance only to the extent of Rs. 6,49,336/- against Rs. 10 lakh disallowed by the AO. 27. At this stage, it is pertinent to note that the ground no. 1 raised by the assessee in the appeal filed by it is against CIT(A)'s order in sustaining the disallowance of Rs. 6,49,336/- u/s 14A of the Act. We, therefore, take up this issue raised by the assessee as well as by the revenue, t....