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2017 (3) TMI 812
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....tions/disallowances to the total income of the assessee. 3. The first issue raised by the Revenue in this appeal is that, the Ld. CIT(A) erred in deleting the addition made by the AO to the tune of Rs. 13,54,945/-, on account of violation of the provision of Section 43B of the Act. 4. The AO during the assessment proceedings observed from Annexure-E of the Tax Audit Report that the assessee has failed to make the payment for ESI, PF and VAT during the year within the stipulated time as mentioned under respective Act. Therefore, the same was disallowed and added to the total income of the assessee. 5. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A). The assessee before the Ld. CIT(A) submitted that the amount of Rs. 13,549,45/- referred in Annexure-E of the Tax Audit Report represents the amount pertaining to the A.Y. 2007-08 and A.Y. 2008-09 for Rs. 9,66,010/- and Rs. 3,88,935/- respectively. The same amount was disallowed by the assessee in those years and added to the total income of those years as discussed above. The same amount was also not paid during the year under consideration but the same was re-iterated in Form 3CD as it was one of the requirem....
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....inning from Page 1 up to Page 280 and re-iterated the submissions as made before the Ld. CIT(A). 7. We have heard the rival contention and perused the materials available on record. In the instant case the AO has invoked the provisions of Sections 43B of the Act by observing that the assessee failed to pay the amount of PF, ESI and VAT within the stipulated time. However, the Ld. CIT(A) found that the impugned amount has already been disallowed in the earlier assessment years and, therefore, the same is not required to be disallowed in the current year. 8. On examination of the order of the lower authorities and other records available before us we find that the amount disallowed by the AO pertains to the A.Y. 2007-08 and 2008-09, as evident from the assessment order which are placed on pages 207 to 209 and 214 to 217. As the impugned amount does not pertain to the year under consideration, therefore, the same cannot be disallowed under the provisions of Section 43B of the Act. In view of the above we find no infirmity in the order of the Ld. CIT(A) and we uphold the same. Hence, this ground of appeal of the Revenue is dismissed. 9. The second issued raised by the Revenue ....
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....lowable. However, in the instant case, interest payment related to 'LIC Mutual Fund' and not 'Life Insurance Corporation'. The term 'Mutual Fund' is not defined in Income Tax Act. Thus, it is worth referring to SEBI (Disclosure & Investor Protection) Guidelines, 2000 which have defined 'Mutual Fund' and 'Public Financial Institution'. The relevant portion is reproduced below: 1.2.1 (xixa) "Mutual Fund" means a mutual fund registered with the Board under the SEBI (Mutual Funds) Regulations, 1966. 1.2.1 (xxiv) "Public Financial Institution" means institution, included in or notified for the purposes of section 4A of the Companies Act, 1956. Thus, I find that 'Mutual Fund' and 'Public Financial Institution' are covered by separate clause. The LIC Mutual Fund is not 'Public Financial Institution' as per section 4A of the Company Act, 1956. However, section 43B covers only Financial Institute and not Mutual Fund. Thus, it can be concluded that interest payment to LIC Mutual Fund is not covered u/s 43B of the Income Tax Act. In the light of the above discussion and finding, I conclude that the A.O. has erred in interpreting the definiti....
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....al institution and therefore it is duly covered under the provisions of section 43B of the Act. However, the Ld. CIT(A) allowed relief to the assessee by observing that LIC mutual fund is not our public financial institution and therefore it is out of the purview of section 43B of the Act. Now, the issue before us arises so as to whether the LIC mutual fund in the instant case is the public financial institution or not. The public financial institution has not been defined under the income tax Act. But the same has been defined under the Companies Act. Therefore at this juncture, it is important to reproduce the provisions of section 4A for the better understanding of the case which reads as under : "4A(1) Each of the financial institutions specified in this sub-section shall be regarded, for the purposes of this Act, as a public financial institution, namely:- (i) The Industrial Credit and Investment Corporation of India Limited, a company formed and registered under the Indian Companies Act, 1913(7 of 1913); (ii) (ii) the Industrial Finance Corporation of India, established under section 3 of the Industrial Finance Corporation Act, 1948 (15 of 1948); (iii) The Industr....
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....ht to Information Act. The relevant part of the order is reproduced below:- "38. As regards LIC Mutual Fund Assets Management Co. Limited, the 5respondents have submitted that the ratio of judgment in the case of Tamil Nadu Road Development company is not applicable to LIC Mutual fund since LIC Mutual Fund is an independent organization and not substantially financed by appropriate government. The submissions of the respondents fall to convince. The LIC of India is a body established, constituted, owned and controlled by Central Government which is the Appropriate Government for the LIC of India and the funding by LIC of India and their general control over the functioning of thee LIC Mutual Fund can be nothing but an indirect funding and control by the Appropriate Government, LIC of India is publics authority having been constituted by an Act of Parliament. LIC of India in turn in order to further carry out their public function have formed LIC Mutual Fund approved for formation 'through subsidiary' which has to function under LIC's control. The respondent Mutual Fund is fully financed and administratively controlled by the LIC of India through a Board of Trustees. The trustees....
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.... failed to submit the documentary evidence for the utilization of Plant and Machinery in the manufacturing of any article or thing in support of additional depreciation claimed by it. Therefore, the additional depreciation claimed by the assessee was disallowed and added to the total income of the assessee. 16. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A). The assessee before the Ld. CIT(A) submitted the details of the additional depreciation as given under: Particulars Installed at showroom Installed at factory Total Air conditioner 2,42,83,685/- NIL/- 2,42,83,685/- Plant & Machinery 6,51,100/- 40,23,340/- 46,74,440/- Total 2,49,34,785/- 40,23,340/- 2,89,58,125/- The assessee further submitted before the ld CIT(A) that there is no condition under the act that the machine should be utilized only for the purpose of manufacturing of any article or thing. However, the ld CIT(A) after considering the submission of the assessee has given the relief in part by observing as under:- "It is evident from the above that during the instant year the appellant has claimed additional depreciation on assets ins....
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.... deduction u/s 32(iia) of the Act. 18.1 At this juncture, we find important to reproduce the provisions of section 32(iia) of the Act which reads as under : (iia) in the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing 26[or in the business of generation or generation and distribution of power], a further sum equal to twenty per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii) : Provided that no deduction shall be allowed in respect of- (A) any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person; or (B) any machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest-house; or (C) any office appliances or road transport vehicles; or (D) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation o....