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TMI Blog2012 (8) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... mployees’ contribution to PF and ESIC - dis-allowance - delayed payment - Held that:- If the employee’s share of contribution is paid before the due date of filing of the return u/s 139(1), then no dis-allowance can be made - Decided in favor of assessee. - ITA Nos 7697/10, &1018/11 - - - Dated:- 27-6-2012 - SHRI G.E. VEERABHADRAPPA, AND SHRI AMIT SHUKLA, JJ. Assessee by : Mr. Deepak Sutharia Revenue by : Mr. Vijay Mehta O R D E R PER AMIT SHUKLA (J.M.) : These are the cross appeals filed by the assessee as well as by the department against order dated 20-8-2010, passed by the CIT (A)-2, Mumbai for the quantum of assessment passed under Section 143(3) for the assessment year 2007-2008. Since common issues are involve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he submitted that similar facts exists in this year also. He referred to schedule of investment given in the balancesheet and details of surplus funds relevant for this year vis- -vis earlier year. As regards disallowance confirmed by CIT(A) on account of administrative expenses, he submitted that tribunal has confirmed the disallowance upto the extent of 5% of the dividend income. Learned DR on the other hand, did not dispute the fact that matter is covered by the decision of the tribunal passed in ITA No.4751/Mum/2010, however strongly relied upon the findings of the Assessing Officer. 5. We have carefully considered the rival submissions and also gone through the finding of the ITAT and the material placed on record. From the perusal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay High Court in this context in the case of Reliance Utilities and Power Ltd. (supra), if there are funds available, both interest free and interest borrowing, then a presumption would arise that investment would be out of interest fee funds generated or available with the company. Relying on the said decision of Hon ble jurisdictional High Court , we hold that the assessee having sufficient own funds to make investment in shares and securities, it cannot be said that interest expenditure incurred by it on borrowed funds which were utilized for the purpose of business was in relation to earning of exempt dividend income so as to warrant any disallowance on account of interest expenditure u/s 14A. The decision of the Tribunal in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent of 5% of the total dividend earnings. Respectfully following the said decision of the coordinate bench of this Tribunal, we sustain the disallowance made by the AO and confirmed by the learned CIT(Appeals) on account of administrative expenses u/s 14A to the extent of 5% of dividend income. Ground Nos.1 to 5 of the assessee s appeal are thus partly allowed. 6. Here in this year also, as per the balancesheet as on 31-3-2007, the share holders fund in the form of share capital and reserve surplus aggregates to more than Rs.73 crores and the in investment in shares were around 57.65 crores. Thus, the assessee had own funds which were available for making the investment in the shares. Thus, the aforesaid decision of the ITAT squarely ..... X X X X Extracts X X X X X X X X Extracts X X X X
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