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TMI Blog2017 (3) TMI 1732X X X X Extracts X X X X X X X X Extracts X X X X ..... ee and against the Revenue as contribution were made within due date of filing IT return as observed by Ld. CIT(A) in his order. While doing so, we find support and guidance from the decision of Co-ordinate Bench of this Tribunal in the case of ACIT v. M/s Vijay Shree Ltd.[2011 (4) TMI 63 - ITAT KOLKATA] for AY 2006-07, wherein it was held that the “employees’ contribution” made towards PF before the due date of filing of return is allowable business expenditure. - Decided in favour of assessee. Addition invoking the provision of Rule 8D(2)(iii) r.w.s. u/s 14A - no exempt income earned by assessee - Held that:- Admittedly, there was no income earned during the year under consideration from the aforesaid investment. It is a settled law that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... selected under scrutiny and notice u/s 143(2)/142(1) of the Act were duly served upon assessee. The assessment was framed u/s. 143(3) of the Act at a total loss of ₹40,36,39,720/- after making certain additions / disallowances to the total income of the assessee. 3. First issue raised by Revenue in this appeal is that Ld. CIT(A) erred in deleting the addition made by Assessing Officer for ₹26,04,701/- on account of delayed deposited of Employees contribution in PF. 4. The AO during the course of assessment proceedings, observed that assessee has failed to deposit the employees' contribution to Provident Fund for ₹22,58,698/- and Employees' contribution to Employees' State Insurance for ₹3,46,003/- within due date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Tribunal in the case of M/s Compact Finstock Pvt Ltd (supra), assessee's appeal on ground no 1 is allowed." Being aggrieved by this, Revenue has come up in appeal before us on the following ground:- "1) That the CIT(A) erred in facts as well as in law in deleting the addition of ₹ 26,04,701/- relying on assessee submission ignoring the reasoned order made by the AO who treated the same as income u/s.2(24)(x) read with rule section 36(1)(va) in view of the meaning of due date as per the explanation to section 36(1)(iv). 6. Before us Ld. DR vehemently relied on the order of AO and he left the issue to the discretion of the Bench. On the other hand, Ld. AR for the assessee filed paper book which is running from pages 1 to 55 and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of return is allowable business expenditure. The above view was also upheld by the Hon'ble jurisdictional High Court vide its order dated 06.09.2011 in ITAT No. 245 of 2011. In this view of the matter, we allow the claim of assessee and uphold the order of Ld. CIT(A). Thus, we hereby direct the AO to delete the disallowance made on account of delayed deposit for PF and ESI. Hence, issue raised by Revenue is dismissed accordingly. 8. Next issue raised by Revenue in this appeal is that ld. CIT(A) erred in deleting the addition made by AO for ₹91,55,500/- by invoking the provision of Rule 8D(2)(iii) r.w.s. u/s 14A of the Act. 9. During the course of assessment proceedings, AO observed that assessee in its balance sheet has shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d (supra) and ITAT Kolkata bench decision in the case of ACIT vs. M/s Vijayshree Ltd (supra), assessee's appeal on ground no 2 is allowed." Being aggrieved by this, Revenue has come up in appeal before us on the following ground:- "2) The Ld. CIT(A) erred in facts as well as in deleting the addition of ₹ 91,55,500/- made by the AO u/s 14A read with rule 8D(2)(iii) by relying fully on the assessee's submissions." 11. Before us both parties relied on the order of Authorities Below as favorable to them. 12. We have heard rival contentions of both the parties and perused the materials available on record. The issue in the instant case relates to disallowance made by AO u/s 14A r.w.s Rule 8D(2)(iii). Admittedly, there was no income ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the same line as mentioned earlier in respect of Numerator B in rule 8D(2)(ii) of the Act. 8.1 Thus, not all investments become the subject-matter of consideration when computing disallowance under section 14A read with rule 8D. The disallowance under section 14A read with rule 8D is to be in relation to the income which does not form part of the total income and this can be done only by taking into consideration the investment which has given rise to this income which does not form part of the total income. Under the circumstances, the computation of the disallowance under section 14A read with rule 8D(2)(iii), which is issue in the assessee's appeal, is restored to the file of the AO for recomputation in line with the direction gi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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