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2019 (4) TMI 551 - AT - Income TaxClaim of deduction u/s 10AA on interest on FOR and Sundry balance written back - HELD THAT - As decided in assessee s own case for Assessment Year 2010-11 2018 (6) TMI 1027 - ITAT MUMBAI sundry credit balance written back represented the sundry creditors related to the export business of the assessee and that the said expenses were considered as part of export business. There is nothing on record to prove that the order of the FAA is factually incorrect. Similarly, it is found that the disputed interest income was earned on fixed deposits pledged with bank or the authorised brokers, that it was a pre-requisite to carry the hedging transaction, that the revenue generated by it from overseas, that hedging transaction were entered into by the assessee as a safeguard against exchange rate fluctuation, that hedging is directly related to export business of the assessee. - Decided against revenue Disallowance u/s 43B - ESIC & PF contribution paid beyond due date - HELD THAT - As decided in assessee s own case as relying on Hindustan Organics Chemicals Ltd.(2014 (7) TMI 477 - BOMBAY HIGH COURT) and Ghatge Patil Transporters Ltd. (2014 (10) TMI 402 - BOMBAY HIGH COURT) held that employee s contribution to PF had to allowed as deduction, if it was paid by the employer before the due date of filing of income. - Decided against revenue.
Issues:
1. Allowance of deduction under section 10AA for interest on FOR and sundry balance written back. 2. Allowance of deduction for Employees' contribution to PF and ESIC paid beyond due dates. Analysis: Issue 1: The appeal by the revenue challenges the order of the ld. Commissioner of Income-tax (Appeals) regarding the deduction under section 10AA for interest on FOR and sundry balance written back for Assessment Year 2014-15. The revenue contends that the deduction should be exclusively related or derived from the business activity of export. The Tribunal considered previous decisions for Assessment Years 2010-11, 2011-12, and 2013-14 where similar grounds were raised. In those cases, the Tribunal upheld the assessee's claim for deduction under section 10AA. The Tribunal noted that the sundry credit balance written back and interest income were directly related to the export business activities of the assessee. Therefore, the Tribunal dismissed ground no.1 of the appeal raised by the revenue, as it was covered in favor of the assessee by previous decisions and the ld. CIT(A) followed the decision of Assessment Year 2011-12. Issue 2: The second ground of appeal relates to the deletion of disallowance under section 40a(ia) for ESIC & PF contribution paid beyond the due date. The Tribunal observed that similar grounds were allowed in favor of the assessee in previous cases by following the decisions of the Hon'ble jurisdictional High Court and the co-ordinate bench of the Tribunal. The Tribunal found no merit in the revenue's ground of appeal based on the precedents and dismissed the appeal. The decision was in line with the cases of Hindustan Organics Chemicals Ltd. and Ghatge Patil Transporters Ltd., where employee contributions to PF were allowed as deductions if paid by the employer before the due date of filing income. In conclusion, the Tribunal upheld the decisions of the ld. CIT(A) for both issues raised by the revenue, thereby dismissing the appeal and maintaining the orders in favor of the assessee.
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