TaxTMI 
TaxTMI 
2018 (6) TMI 828
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....s of sec. 194C of the Act. On being asked, the Ld. AR admitted the fact of non-deduction of TDS. Hence, the AO disallowed the expenditure claimed on this issue and added back the said sum of Rs. 10,13,46,162/- to the total income of the assessee invoking section 40(a)(ia) of the Act read with section 194C of the Act. Aggrieved, assessee preferred an appeal before the Ld. CIT(A). Before the Ld. CIT(A) the assessee submitted that it had in fact deducted tax in terms of section 194C of the Act on the payment of coal washing charges but had not deposited the tax in the government account by 30.09.2010, which was normal due date of filing of return, however, the payment (TDS) had actually been made on 06.10.2010 (during the extended period for filing of return as allowed by the CBDT from 30.09.2010 to 15.10.2010) which has been duly mentioned on the relevant TDS certificates and TDS return also. Taking into consideration the aforesaid fact that TDS had been remitted during the extended period for filing of return as allowed by the CBDT from 30.09.2010 to 15.10.2010, the Ld. CIT(A) deleted the disallowance by observing as under: "3.2. Thus, it has been submitted that the appella....
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....s well within the extended due date for filing of return of income. Therefore, in my opinion, disallowance of same under section 40(a)(ia) is not proper. It may also be mentioned that even if a view is taken that amount is to be disallowed in this year, then in view of proviso to section 40(a)(ia), deduction for the same would have to be given in subsequent year on payment basis. Thus, over a period of two years, the exercise would be revenue neutral and there would be no net impact on income or tax liability. Considering all these factors, the disallowance u/s 40(a)(ia) is deleted. " 2.2. We have heard rival submissions and gone through the orders of the lower authorities and the materials available on record. Before us, the Ld. AR of the assessee reiterated the same submission as submitted before the lower authorities. Since TDS has been remitted to the Govt. within the extended period for filing of return as vivid from the facts and in any case if disallowed this year, the assessee could have got the claim allowed in the next year on the strength of the TDS certificate as per the proviso to sec. 40(a)(ia) of the Act as rightly observed by the Ld. CIT(A). So in any way the act....
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....case. We note that the assessee had own funds in form of equity and free reserves of Rs. 4882.89 cr. (as at the beginning of the year) and gross sales of Rs. 3449.04 cr. which is far in excess of even the total investments as at 31.03.2010 which aggregates to only Rs. 678.58 cr. So, assessee has own surplus funds, so presumption is that assessee has used its own funds for investment and not the borrowed funds for investment. We hold that the assessee has got sufficient own funds to make the investments and when that point is not in dispute, no disallowance could be made u/s 14A of the Act read with Rule 8D(2)(ii) of the Rules. Reliance in this regard is placed on the following decisions:- CIT-vs.- Reliance Utilities & Power ltd. reported in 313 ITR 340 (Bom.) Interest on borrowed capital- investments by assessee- finding that investments were from interest free funds available with assessee-borrowed capital for the purposes of business- interest deductible under Income Tax Act u/s 36(1)(iii). G.D. Metsteel Pvt. Ltd. -vs.- ACIT reported in 142 TTJ 641 (Mumbai Tribunal) Held that the investments are made by the assessee's own funds and have been made in the earlier years, no....
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....dinate bench in the case of REI Agro Ltd. Vs. DCIT 144 ITD 141. We confirm the Ld. CIT(A)'s order on computation of disallowance under Rule 8D(iii) of the Rules and order accordingly. Therefore, this ground of appeal of revenue is dismissed and assessee's ground 2 of appeal is partly allowed. 4. Ground no. 3 of assessee's appeal is against the order of Ld. CIT(A) in holding that the disallowance made u/s. 14A of the Act by invoking Rule 8D of the Rules will have to be added back while computing the book profit for the purpose of sec. 115JB of the Act. 4.1. We have heard rival submissions and gone through the facts and circumstances of the case. We also note that the issue is squarely covered by the decision of Hon'ble jurisdictional High Court in the case of CIT Vs. Jayshree Tea & Industries Ltd. vide GA No. 1501 of 2014, ITAT 47 of 2014 dated 19.11.2014 wherein the similar question arose which reads as under: "2. Whether on the facts and in the circumstances of the case the Ld. Tribunal has erred in law in upholding the order of CIT(Appeals) that disallowance under Section 14A of the I. T. Act, 1961, amounting to Rs. 2,20,15,787/- is not to be considered for book pr....
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....he facts and circumstances of the case, We note that the AO added back a sum of Rs. 123 lakhs out of Rs. 398 lakhs on account of provision for leave encashment u/s. 43B(f) of the Act as the said sum of Rs. 123 lakhs remained unpaid. The Ld. CIT(A) confirmed the disallowance as made by the AO. We note that the similar issue had come up before this Tribunal in M/s. S. R. Batliboi & Co. vs. DCIT, ITA No. 1598/Kol/2011 for AY 2007-08 wherein the Tribunal vide para 4 has held as under: "4. After hearing rival submissions and going through the facts and circumstances of the case and the order of the Tribunal cited supra, we find that the issue is dealt by the Coordinate bench of this Tribunal as under: "3. At the outset, ld. senior counsel for the assessee submitted that in all these three appeals, the issue relates to allowability of provision for leave encashment in terms of sub-section (f) of section 43B of the Income Tax Act. The assessee had advanced its claim relying on the decision of the Hon'ble Kolkata High Court in the case of M/s. Exide Industries Ltd. reported in 292 ITR 470. However, the Assessing Officer did not accept the assessee's claim observing that D....