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TMI Blog2016 (2) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... eal against an order of assessment can confirm, reduce, enhance or annul the assessment. The power of setting aside which was available to CIT(A), is no more available to CIT(A) by virtue of amendment made by Finance Act 2001 with effect from 1.06.2001. Thus it can be seen that in the present case CIT(A) has set aside the issue to the file of A.O, the powers of which are not available to him at the relevant time. We therefore are of the view that the matter needs to be restored to the file of CIT(A) for considering the submissions of the Assessee and thereafter deciding the issue on the basis of facts and circumstances of the case and in accordance with law and after recording a clear finding on the issue. - Decided in favour of Revenue for statistical purposes. Disallowance of PF and ESIC expenses - delayed deposit of employees contribution of PF - Held that:- As decided in case of GSRTC [2014 (1) TMI 502 - GUJARAT HIGH COURT] any sum with respect to the employees contribution as mentioned in s. 36(l)(va), assessee shall be entitled to the deduction of such sum towards the employees contribution if the same is deposited in the accounts of the concerned employees and in the conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 13,73,945/-, thus in effect setting-aside the issue to the file of AO , which is beyond the powers of CIT(A) u/s. 251. 3. The Ld. Commissioner of Income tax [A] has erred in law and on facts in directing the AO to verify the contentions of the assessee regarding addition of ₹ 5,34,612/- being increase in unsecured loans from shareholder and directors , thus in effect setting-aside the issue to the file of AO, which is beyond the powers of CIT(A) u/s 251. 4. The Ld. CIT(A) has erred in law and on facts in deleting the disallowance of loss of ₹ 18,30,727/-. 5. On the other hand the grounds by the Assessee in C.O reads as under:- 1. The ld. CIT(A) has grossly erred in law and facts is passing the order. 2. In law and in the facts and circumstances in the case of respondent. The honorable Commissioner of income Tax (Appeals) has grossly erred in confirming disallowance of ₹ 27,282/- PF and ESI expenses u/s. 43B of the Act. 3. In law and in the facts and circumstances in the case of respondent. The honorable Commissioner of income Tax (Appeals) has grossly erred in confirming disallowance of ₹ 2,39,444/- u/s. 40A(3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. 9. We have heard the ld. D.R. and perused the material on record. The issue in the present case is about disallowance of Directors remuneration. A.O had disallowed the expenses on comparing the expenses with that of earlier year. We further find that apart from the absolute increase in terms of expenses no material has been brought on record to demonstrate the excessiveness of remuneration. We also find that ld. CIT(A) while deleting the addition has noted that the two Directors to whom the remuneration was paid have shown the remuneration received from the Assessee as their income and has also paid the taxes. He has also given a finding that the payment of excess remuneration cannot be considered to be a diversion of income with a view to avoid taxes. Before us, Revenue has not placed any material on record to controvert the findings of ld. CIT(A). In view of the aforesaid facts, we find no reason to interfere with the order of ld. CIT(A). Thus the ground of Revenue is dismissed. 2nd ground is with respect to deletion of disallowance of various expenses. 10. During the course of assessment proceedings, A.O noticed that Assessee has debited ₹ 6,64,509/- towards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. The perusal of provisions of Section 251(1)(a) reveals that CIT(A) in an appeal against an order of assessment can confirm, reduce, enhance or annul the assessment. The power of setting aside which was available to CIT(A), is no more available to CIT(A) by virtue of amendment made by Finance Act 2001 with effect from 1.06.2001. Thus it can be seen that in the present case CIT(A) has set aside the issue to the file of A.O, the powers of which are not available to him at the relevant time. We therefore are of the view that the matter needs to be restored to the file of CIT(A) for considering the submissions of the Assessee and thereafter deciding the issue on the basis of facts and circumstances of the case and in accordance with law and after recording a clear finding on the issue. In the result, the ground of Revenue is allowed for statistical purposes. Ground no. 3 is with respect to deletion of addition of unsecured loan. 15. On perusing the Balance sheet, A.O noticed that there was an increase in unsecured loan received from shareholders and directors aggregating to ₹ 5,34,612/- as compared to that of immediate preceding year. In the absence of any confirmation or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for statistical purposes. 20. In the result, the ground of appeal is allowed for statistical purposes. Ground no. 4 is with respect to deleting the disallowance of loss. 21. A.O noticed that Assessee had claimed loss of ₹ 44,98,864/- and the total disallowances as worked out by him comes to ₹ 26,68,137/-. He was of the view that since the Assessee has not proved the loss by furnishing the required information nor produced any books of accounts, the loss of ₹ 18,30,727/- (Rs.44,98,864 26,68,137/-) cannot be allowed. He accordingly disallowed the same. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who deleted the addition by holding as under:- 11.3.2. I have considered the submissions made by the A. R. of the appellant and the observations made by the A.O. at para-9 of the assessment order. In the assessment order, at para-9, A.O. observed that Since the assesses has not proved the loss by furnishing information as called for nor produced any books of accounts, after considering the disallowance of ₹ 26,68,137/- as discussed above, further addition of ₹ 78,30,727/- is made on account of balancing addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gujarat State Road Transport Corporation reported in (2014) 366 ITR 170 (Guj.). He thus supported the order of ld. CIT(A). 30. We have heard the ld. D.R. and perused the material on record. The issue in the present case is about delayed deposit of employees contribution of PF. We find that Hon ble Gujarat High Court in the case of GSRTC (supra) has held has under:- any sum with respect to the employees contribution as mentioned in s. 36(l)(va), assessee shall be entitled to the deduction of such sum towards the employees contribution if the same is deposited in the accounts of the concerned employees and in the concerned fund such as Provident Fund, ESI Contribution fund, etc provided the said sum is credited by the assessee to the employees accounts in the relevant fund or funds on or before the due date under the Provident fund Act, ESI Act, Rule, Order or Notification issued thereunder or under any Standing Order, Award, Contract or Service or otherwise. .. 31. In view of the aforesaid decision of Hon ble Gujarat High Court, we find no reason to interfere with the order of ld. CIT(A) and thus the ground of Assessee is dismissed. 2nd ground is with respect to d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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