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TMI Blog2006 (7) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... f provident fund could not be paid by the assessee before the due date. The code number was allotted to the assessee on 20-7-2000 and immediately thereafter the dues were paid on 28-7-2000. The Assessing Officer as well as the CIT(A) disallowed the claim of the assessee by observing that the amount of provident fund was not deposited within the due date prescribed under the law. 4.2 After considering the submissions and perusing the relevant material on record, we find that the assessee deserves to succeed in its appeal as there was a reasonable cause for not depositing the amount in time because the code number which is essential for making the deposit was not allotted to the assessee, therefore, the same could not be deposited. As soon as the code number was allotted to the assessee, the dues on account of provident fund were immediately deposited. We further noted that the issue is covered by the decision of the Delhi Bench of the Tribunal in the case of Addl. CIT v. Vestas RRB India Ltd. [2005] 92 ITD 1 wherein it has been held that if the amount was deposited before filing the return of income, no disallowance can be made under section 43B of the Act. Therefore, in view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forward loss of Rs. 63,15,433 and a brought forward unabsorbed depreciation of Rs. 17,10,316 in terms of section 72 read with section 32(2) in computing its income for the assessment year under consideration. The Assessing Officer denied the claim by invoking the provisions of section 79 as according to him, there was a change in shareholding as on the last date of the previous year in which the loss was incurred and the last date of the previous year in which the loss was sought to be set off. As stated above, the CIT(A) has also confirmed the action of the Assessing Officer for the reasons recorded in para 9.3 of his order and come to the conclusion that there was change in shareholding during the financial year 1998-99, accordingly the assessee was not to be allowed the privilege of carry forward loss. 6.3 We have seen the entire gimmick of the case. Few relevant facts are that the unabsorbed business loss and the unabsorbed depreciation for which a set off is claimed was determined in the assessment framed for the assessment year 1998-99. As on the last date of the previous year relevant to assessment year 1998-99 i.e. on 31st March, 1998, the assessee was a 100 per cent subsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e change in shareholding, the assessee was a company in which the public was substantially interested inasmuch as its entire shareholding was initially held by ITC Classic. As per the contention of the ld. AR, thereafter the assessee became 100 per cent subsidiary of ICICI and thereafter of ITC. No doubt, all the three companies admittedly being companies whose share are listed on a recognized stock exchange. There is no dispute that the public were substantially interested in these three companies; therefore, being so, restrictive provisions of section 79 cannot be applicable. However, it is not clear from the fact of the present case that now the assessee-company is a 100 per cent subsidiary or not in which the parental company was merged and thereafter the shares of that company were merged to ITC Classic. To verify and ascertain the factual position, we remit back the issue to the file of the Assessing Officer. If it is found that the assessee is a 100 per cent subsidiary of the company in which the public were substantially interested then it has to be held that the provisions of section 79 are not applicable otherwise the Assessing Officer will pass a fresh order in accordanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome is exempt in the hands of the assessee. Accordingly, we do not see any substance in the ground of the department. 10. Second ground relates to deletion of addition of Rs. 4,75,335 being penalty charged by National Stock Exchange. 10.1 The Assessing Officer has disallowed a sum of Rs. 4,75,335 being penalty debited to Profit & Loss Account by holding the same is in violation of the provisions of Act and accordingly the same is not allowable as tax. The CIT(A) deleted the addition by holding that the penalty charges which were charged by the National Stock Exchange were on account of the following reasons : -Auction short delivery charges -Delivery margin pay-in-shortage Bad delivery charges Interest on aforesaid charges Violation fines (Margin) The penalty was charged by NSE on the above shortcomings and the shortcomings are such which can be stated that they were in violation of the provisions of law. While deleting the addition, the CIT(A) has also taken into consideration various case laws relied upon by the ld. counsel for the assessee before him. 10.2 We have seen the findings of the CIT(A) and found that the CIT(A) was justified in allowing the ground of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a as per ground of appeal No. 5 succeeds." 10.3 Neither the findings of the CIT(A) could not be controverted by the ld. Departmental Representative nor any other material was brought on record to establish otherwise. Therefore, in view of the reasoning given by the ld. CIT(A), we confirm his order on this issue. 11. Third ground relates to deletion of addition of Rs. 57,35,720 made by the Assessing Officer being interest attributable to the interest bearing loans taken but advanced interest-free loans to others/associate concerns. 11.1 The CIT(A) allowed the ground of the assessee by observing that the Assessing Officer himself verified and found that the interest bearing fund has not been utilized for giving this interest-free money as propounded. It has been further observed by the CIT(A) in para 8.7 of his order that the Assessing Officer has also given a finding in the remand report that the interest bearing fund has been utilized for non-business purpose. So in other words it means that the same has been utilized for business purposes and the interest payments against the same are allowable deductions under section 36(1)(iii). 11.2 After considering the observations of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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