2018 (7) TMI 1551 - AT - Income Tax

Addition u/s 14A r.w.r. 8D - Held that - Assessee has not derived any exempt income in the impugned assessment year. Hon ble jurisdictional high court s decision in CIT vs M/s Ashika Global Securities Ltd. 2018 (7) TMI 1425 - CALCUTTA HIGH COURT upholds tribunal s similar order deleting identical disallowance in absence of exempt income. Disallowance u/s 80IB - Held that - There is no dispute that the assessee s concerned allotments of the residential units took place upto 06.08.2008 only whereas the statutory amendment in the Act i.e. section 80IB(10) (e) and (f) came into operation from 01.04.2010 with the said amendment to be having prospective effect only. Assessee quotes hon ble apex court s decision in CIT vs M/s Sarkar Builders 2015 (5) TMI 555 - SUPREME COURT settling the law about the above statutory amendment to be prospective effect. Learned Departmental Representative fails to rebut this settled legal position. We therefore uphold the CIT(A) s findings in deleting the impugned 80IB deduction disallowance. This Revenue s instant second substantive ground is declined Disallowing assessee s late payment pertaining to the employees contribution to PF - Held that - We find herein as well that the hon ble jurisdictional high court s decision in Vijayshree Ltd. 2011 (9) TMI 30 - CALCUTTA HIGH COURT has settled the law holding that such payment before the due date of filing return u/s 139(1) as allowable. We accordingly reject Revenue s instant last and substantive ground as well.

Summary

Issues involved:
1. Disallowance under section 14A r.w.r. 8D
2. Disallowance under section 80IB
3. Disallowance of late payment of employees' PF contribution

Issue 1: Disallowance under section 14A r.w.r. 8D
The appellant's appeal for A.Y. 2011-12 challenged the CIT(A)-2, Kolkata's order reversing the Assessing Officer's disallowance of amounts under section 14A r.w. rule 8D. The tribunal upheld the CIT(A)'s decision as the assessee did not have any exempt income in the relevant assessment year. Citing a jurisdictional high court decision, the tribunal found no reason to interfere with the CIT(A)'s findings, leading to the Revenue's failure in this ground.

Issue 2: Disallowance under section 80IB
The dispute revolved around the disallowance of a deduction under section 80IB amounting to ?3,83,86,013 related to a housing project. The Assessing Officer contended that the assessee had allotted more than one residential flat to multiple parties, violating the provisions of section 80IB(10). However, the CIT(A) reversed this action after considering the facts and legal provisions. Citing relevant case laws, the tribunal concluded that the statutory amendments had prospective effect and upheld the CIT(A)'s decision to allow the deduction entirely.

Issue 3: Disallowance of late payment of employees' PF contribution
The third issue concerned the disallowance of ?70,355 for late payment of employees' PF contribution. The tribunal referred to a high court decision establishing that such payments made before the due date of filing return were allowable. Relying on this legal precedent, the tribunal rejected the Revenue's argument and dismissed the appeal, affirming the CIT(A)'s decision.

In conclusion, the tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decisions on all three substantive grounds. The judgment provided detailed analysis of each issue, considering legal provisions, case laws, and factual circumstances to arrive at the final decision.