2012 (9) TMI 545 - AT - Income Tax

Dis-allowance u/s 80IC - interest on late payment of sale bills and miscellaneous income contended by Revenue as income from other sources - Held that - Assessee is entitled to the relief with respect of deduction u/s 80IC in relation to interest on late payment of bills, but in the absence of details of miscellaneous income, such relief could not be granted to the assessee in this regard. Dis-allowance u/s 43B - belated payment of contribution towards employees provident fund - Held that - Since same is paid before the due date for filing of the return hence allowed. Addition on account of repair and maintenance and labour charges - dis-allowance u/s 40(a)(ia) - assessee now placing reliance on decision in case of Merilyn Shipping & Transport - Held that - Since issue raised in this ground does not arise from the order of CIT(A), hence, impugned order is not interfered with - Decided partly in favor of assessee

Summary

Issues:
1. Disallowance of employees' contribution to provident fund.
2. Disallowance of TDS and labor charges.
3. Treatment of interest income and miscellaneous income.
4. Claim of deduction u/s 80IC on total income from industrial undertaking.

Issue 1: Disallowance of employees' contribution to provident fund:
The assessee challenged the disallowance of employees' contribution to provident fund by the CIT(A). The Ld.Counsel cited Delhi High Court and Supreme Court decisions in favor of the assessee. The Tribunal found that the contribution was paid before the due date for filing the return, in line with the cited decisions. Consequently, the Tribunal directed the deletion of the addition made by the Assessing Officer and confirmed by the CIT(A).

Issue 2: Disallowance of TDS and labor charges:
The second issue involved disallowance of TDS and labor charges under section 40(a)(ia) of the Act. The Ld.Counsel contended that a special bench decision supported the deletion of the addition. However, the Tribunal found that this issue did not arise from the CIT(A)'s order. Consequently, the Tribunal dismissed this ground of appeal, upholding the decision of the authorities below.

Issue 3: Treatment of interest income and miscellaneous income:
Regarding the treatment of interest income and miscellaneous income, the assessee argued that both incomes directly arose from the undertaking and should not be disallowed under section 80IC. The Ld. DR supported the CIT(A)'s order, highlighting the lack of details on the miscellaneous income. The Tribunal allowed the appeal for interest income but upheld the addition for miscellaneous income due to insufficient details, partially accepting this ground of appeal.

Issue 4: Claim of deduction u/s 80IC on total income from industrial undertaking:
The final issue concerned the disallowance of the claim u/s 80IC on the total income from the industrial undertaking. The Ld.Counsel relied on various judgments to support the deduction claim. The Tribunal, after considering the precedents, found that this issue was not adequately addressed by the authorities below. In the interest of justice, the Tribunal set aside this issue and directed a re-consideration by the Assessing Officer after providing the assessee with a hearing opportunity. Consequently, the appeal was partly allowed for statistical purposes.

In summary, the Tribunal ruled in favor of the assessee on the disallowance of employees' contribution to provident fund and interest income, partially allowing the appeal. However, the disallowance of TDS, labor charges, and miscellaneous income was upheld. The Tribunal also directed a re-consideration of the claim for deduction u/s 80IC on the total income from the industrial undertaking.