TaxTMI 
TaxTMI 
2018 (5) TMI 499
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.... deleting the addition of Rs. 13,91,404/- on a wrong appreciation of facts ignoring the provisions of section 37 of the IT Act, 1961. iii. That on the facts of the case Ld. CIT(A) has erred in deleting the addition of Rs. 20,25,329/- on wrong appreciation of facts ignoring the provision of section 14 read with rule 8D and overrule the judicial pronouncement of the Hon'ble Bombay High Court in the case of Godrej & Boyce Mfg Co. Ltd. vs. DCIT, Range 10(2), Mumbai (2010) 194 taxman 203 Bombay. iv. That on the facts of the case Ld. CIT(A) has erred in deleting the addition of Rs. 58,121/- on wrong appreciation of facts ignoring the provision of section 2(24)(x) read with section 36(1)(va) in the case of employees contribution and overrule the judicial pronouncement of the Hon'ble Gujarat High Court in the case of CIT vs. GRTC which was concluded after consider the ratio judgment in the case of Alom Extrusion Ltd. v. That on the facts of the case Ld. CIT(A) has erred in deleting the addition of Rs. 3,33,789/- on a wrong appreciation of facts ignoring the provisions laid down in section 195 in the I Act, 1961 w.r.t. 194A. vi. That on the facts ....
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....year was Rs. 74,62,58,745/- trading in chemicals against which it has declared income of Rs. 1,99,28,630/- and paid tax of Rs. 86,17,933/-. The expenses on staff tea, water, snacks expenses cannot be expected to be supported with external vouchers. The genesis of such expenditure is mainly by cash through slips and internal vouchers. The quantum of the expenditure in comparison to the business is meager and an important ingredient of a business. Similar of expenses have been incurred in the previous year's and therefore the expenses were part and parcel of the business. In view of the overall facts and circumstances of the case the addition made by the AO was uncalled for and is directed to be deleted. This ground of appeal is disposed off as allowed." The Revenue, being aggrieved is in appeal before us. 5. Before us Ld. DR vehemently relied on the order of AO whereas Ld. AR for the assessee filed paper book which is running pages from 1 to 140 and drew our attention on pages 56 of the paper book, where the month-wise of details of such expenses were placed. He reiterated the same submissions that were made before Ld. CIT(A). He supported the order of Ld. CIT(A). 6. We hav....
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....gainst which they have declare income of Rs. 1,99,28,630/- and paid tax of Rs. 86,17,933/-. The business of the appellant is trading in chemicals for which the majority of the materials purchased are imported. The appellant had furnished before the AO details of foreign travel along with breakup of the travel and purpose of visit and the persons who have visited. From the details it is seen that the total expenditure incurred by the appellant was of Rs. 13,91,404/- on foreign tour and travels visited by the Directors and Employees for Exhibitions, sales meetings with suppliers, trade related shows. The expenses in comparison to the previous years have reduced from around 20 laksh to around 13 lakhs in the year. Further the appellant is importing it materials and selling them in India and the client and dealer visit is important part the business of the appellant without which the appellant would not be able to continue increase of its turnover as well as profits and its business. The expenditure on foreign travel is directly related the appellants business of import of chemicals and therefore inextricable linked to the business. In view of the overall facts and circumstances of the....
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....8D(2)(iii) Administrative expense 2,91,508 However, AO was of the view that the assessee has claimed interest expenses in its profit and loss account but no disallowance on account of interest has been made under Rule 8D(2)(ii) of IT Rules. Accordingly, AO made the disallowance of Rs. 22,47,060/- under Rule 8D(2)(ii) of IT Rules, 1962 and added to the total income of assessee. 14. Aggrieved, assessee preferred an appeal before Ld. CIT(A). The assessee before Ld. CIT(A) submitted that its own capital and free reserve of exceeds the amount of investment. Therefore, an inference can be drawn that no interest expense has been incurred claim by the assessee in relation to such exempted income. The assessee also submitted that investment which has yielded dividend income during the year only be considered for the purpose of Section 14A r.w.s 8D of IT Rules, 1962. Ld. CIT(A) after considering the submission of assessee partly deleted the addition made by the AO by observing as under:- "6.2 I have considered the submission of thee appellant in light of the assessment order by the AO to make the impugned disallowance. From the audited accounts it is seen that ....
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....ed for the purpose of investment. Ld. AR for the assessee in support of assessee's claim drew our attention on pages 103 and 104 of the paper book wherein the details of loan and interest paid thereon were placed. As per the Ld. AR the interest have been paid on the car loan, term loan and interest on buyers credit and similarly interest was paid on cash credit facility taken from ICICI Bank. Ld. AR also relied on the order of Ld. CIT(A). 16. We have heard the rival contentions of both the parties and perused the material available on record and case law cited by the parties. From the foregoing details we note that there is no ambiguity with regard to own fund available with the assessee. In such facts and circumstances a presumption can be drawn that investment has been made out of own fund of assessee. Therefore no disallowance on account of interest expense should be made under Rule 8D(2)(ii) of IT Rules. In holding so, we draw our support and guidance from the judgment of Hon'ble Bombay High Court in the case of Reliance Utilities and Power Ltd. reported in 313 ITR 340 wherein it was held as under:- "The principle therefore would be that if there are funds avail....
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..... Respectfully following the decision of the Hon'ble Calcutta High Court the disallowance made by the AO on account of contribution to employees provident fund for Rs. 58,181/- stands deleted. This ground of appeal is disposed off as allowed." The Revenue, being aggrieved by this order of Ld. CIT(A) is in appeal before us. 20. Before us both parties relied on the order of Authorities Below as favorable to them. 21. We have heard rival contentions of both the parties and perused the material available on record. We find that the AO has made the addition of the amount of the employee contribution as there was a delay in payment of employee provident fund to PF authorities. However from the assessment order we find that all the payment of employees contribution were made before the due date of filing of Income Tax Return as specified u/s 139(1) of the Act. Now, this issue stands covered in favour of assessee and against the Revenue by the decision of Hon'ble jurisdictional High Court in the case of CIT v. M/s Vijay Shree Limited vide ITAT No.245 of 2011 in GA No.2607 of 2011 dated 7th September, 2011, wherein it has been held as under:- "After hearing Mr. Sinha, ....
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....- on account of Non deduction of TDS. 24. Aggrieved, assessee preferred an appeal before Ld. CIT(A). The assessee before Ld. CIT(A) submitted that there is no liability of deducting the tax on the payment of interest on the basis of Form 15CA. In fact, the Form 15CA issued by CA certificate justifies that the assessee is not liable for the deduction of TDS on the payment of such interest. The assessee also submitted that interest was paid to the bank and therefore there was no liability for the deduction of TDS u/s 194A of the Act. Ld. CIT(A) after considering the submission of assessee deleted the addition made by the AO by observing as under:- "9.2 I have considered the submission of the appellant in the backdrop of the assessment order passed by the AO in making the impugned disallowance. The Form No.15CA filed by the appellant in respect of the payment of interest nowhere suggests the applicability of TDS provisions of the Act. The appellant also filed certificate of accountant in Form 15CB in respect of all the payments on which the impugned disallowances have been made and the auditor has not attached any liability for deduction of tax at source. The payments of i....
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....ch, in our considered view the basis of disallowance of interest expenses made by AO does not hold good. In the backdrop of the above discussion we do not find any infirmity in the order of Ld. CIT(A) and accordingly we uphold the same. This ground of Revenue's appeal is dismissed. 27. Last issue raised by Revenue in ground No. vi is that Ld. CIT(A) erred in deleting the addition made by the AO for Rs. 8,28,655- on account of non deduction of TDS u/s. 194J of the Act. 28. The assessee during the year has claimed an expense of Rs. 8,28,655/- under the head legal and profession charges. These charges were paid by assessee to ICICI Bank Ltd on account of loan processing fees. As such the bank has deducted the aforesaid loan processing charges from the balance of assessee available with the bank. Therefore, assessee did not deduct the TDS. However, AO opined that assessee was liable to deduct the TDS u/s. 194J of the Act on loan processing charges paid to the bank. As per the provision of Section 194J the TDS is required to be deducted at the time of credit of such amount to the account of payee by any mode, cash or by issue of cheque or draft whichever is earlier. Accordingly, t....