2021 (5) TMI 423 - AT - Income Tax

Addition u/s. 36(1)(va) - delayed employees contribution towards EPF and ESIC - HELD THAT - It is undisputed fact that assessee has paid employees contribution to PF and towards ESIC beyond the period prescribed in the specified act. Therefore following the decision of Gujarat State Road Transport Corporation 2014 (1) TMI 502 - GUJARAT HIGH COURT we do not find any infirmity in the decision of ld. CIT(A). Therefore this ground of appeal of the assessee is dismissed. TDS u/s 194A - Disallowance of interest expenses u/s 40(a)(ia) - non deduction of TDS on payment of interest - HELD THAT - The assessee has not furnished any material to controvert the aforesaid finding of the Assessing Officer for not making compliance with the provision of section 40(a)(ia). In addition to above it is also noticed that counsel of the assessee has voluntarily agreed for the disallowance of interest expenditure since the assessee has failed to make compliance with the provision of section 40(a)(ia) of the Act. Keeping in view of the aforesaid undisputed facts and circumstances we do not find any infirmity in the decision of ld. CIT(A). - Decided against assessee.

Summary

Issues:
1. Addition of &8377; 12,03,693/- u/s. 36(1)(va) of the Act
2. Disallowance of interest expenses of &8377; 4,21,348/- u/s 40(a)(ia) of the Act

Issue 1: Addition of &8377; 12,03,693/- u/s. 36(1)(va) of the Act

The assessee's appeal for A.Y. 2014-15 was based on the order of the CIT(A)-2, Vadodara dated 24-01-2018, under section 143(3) of the Income Tax Act, 1961. The Assessing Officer disallowed the total amount of &8377; 12,03,693/- related to employees' contributions towards EPF and ESIC u/s. 36(1)(va) of the Act as they were deposited beyond the prescribed period. The CIT(A) upheld this disallowance, citing the decision of the Hon'ble Gujarat High Court in the case of Gujarat State Road Transport Corporation. The Tribunal, after considering the facts and legal precedents, dismissed the appeal, finding no infirmity in the CIT(A)'s decision.

Issue 2: Disallowance of interest expenses of &8377; 4,21,348/- u/s 40(a)(ia) of the Act

During the assessment, it was observed that the assessee had not deducted tax on interest payments made to certain parties, resulting in interest expenses of &8377; 4,21,348/- being disallowed u/s. 40(a)(ia) of the Act. The assessee voluntarily agreed to this disallowance before the Assessing Officer. The CIT(A) also upheld this disallowance. The Tribunal noted that the assessee had indeed failed to deduct tax on the interest payments, as required by law. The Tribunal found no merit in the appeal, as the assessee did not provide any material to refute the findings of the Assessing Officer. Given the undisputed facts and the voluntary agreement of the assessee, the Tribunal upheld the CIT(A)'s decision to dismiss the appeal.

In conclusion, the Tribunal upheld the decisions of the CIT(A) regarding both issues, resulting in the dismissal of the assessee's appeal for A.Y. 2014-15.