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TMI Blog2019 (6) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... as compared to total sales of FY 2010-11 i.e. by 25.58%. The assessee company filed details that there is an increase in customer basis by 76 customers, where sales are more than of ₹ 50,000/- - out of increase in total sales of ₹ 2,15,02,232/- as narrated above the sales of ₹ 1,07,25,036/- i.e. almost 50% is from this new customers. It was contended that even the export sales have grown by 45.52%.There is substantial increase in profit before tax as compared to earlier and i.e. by 48.23%. In view of this facts, were are of the view that the CIT(A) has rightly deleted the addition and we confirm the same. This issue of Revenue s appeal is dismissed. Disallowances of interest u/s 36(1)(iii) - utilization of interest free funds in capital work in progress - HELD THAT:- noted that the assessee s own capital i.e. interest free funds available as on 31.03.2012 is ₹ 5,30,46,131/- as against the investment made in capital work in progress at ₹ 2,32,02,581/-. Even non business investment is ₹ 36,49,657/-. It means that the assessee s own interest free funds are more than the investment made in non-business investments. The CIT(A) has rightly deleted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shah, Ms. Zankhana Sanghvi, ARs ORDER PER MAHAVIR SINGH, JM: This appeal filed by the Revenue is arising out of the orders of Commissioner of Income Tax (Appeals)-20, Mumbai [in short CIT(A)], in appeal No. CIT(A)-20/DCIT-12(1)(1)/IT-65/15-16, dated 29.09.2017. The Assessment was framed by the Dy. Commissioner of Income Tax, Circle-12(1)(1) Mumbai (in short DCIT/ITO/ AO) for the A.Y. 2012-13 vide order dated 23.03.2015 under section 143(3) of the Income Tax Act, 1961 (hereinafter the Act ). 2. The first issue in this appeal of Revenue is against the order of CIT(A) deleting the addition made by AO on account of commission paid to director Shri, Alpesh Gandhi under section 36(1)(ii) of the Act. For this Revenue has raised the following ground No. 1: - 1. Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A) was right in deleting the addition made u/s 36 (1)(i1) of the Act to the tune of Ps 42,11,363/- on account of commission paid to director Shri Alpesh Gandhi without appreciating the fact that the payments was more than other directors without justification and it was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e component of commission was a part of remuneration package of the executive director as part of all shareholders. This variable commission is based on his performance evaluation and also considering his contribution in meeting the financial performance of the company. It was contended before us that Alpesh Gandhi is a highly qualified person and detail of his qualification, functions performed and services rendered were filed before AO as well as before CIT(A). The CIT(A) has reproduced the functions performed and services rendered in the assessee company apart from the other directors read as under: - Name of director Education qualification Functions performed/ services rendered Mr. Alpesh Gandhi Bachelor of Engineering (In Rubber Technology branch), Master of Business Administration (MBA) (in marketing field) from Jamnalal Bajaj Institute of Management studies (JBIMS) Executive director having responsibility of overall operation and management of the Company Development of loca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funds available and the investment made in capital work-in-progress is comparatively less amounting to ₹ 2,32,02,582/- as against share capital and reserve and surplus at ₹ 5,30,46,131/-. The CIT(A) considered the details vide Para 5.4 as under: - 5.4 Decision on Ground No. 3 5.4.1 I have considered the contention of the AO and submissions made by the appellant. I find from the balance sheet of the appellant as at the beginning and end of the relevant P.Y. Records that the interest free fund available with the appellant as at 31.03.2011 31.03.2012 were as under: Particulars As at 31.03.2011 (Rs.)(Read as 2012) As at 31.03.2012 (Rs.) (Read as 2011) Share capital 40,10,000 40,10,000 Reserves Surplus 4,90,36,131 3,35,72,002 Total 5,30,46,131 3,75,82,002 5.4.2 The capital wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D of the Act to the tune of ₹ 1,01,682/- without appreciating the fact that assessee could not prove satisfactorily that own funds were used in buying the investment? 4. Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A) was right in deleting the addition made u/s. 14A rw. Rule 8D(2)(iii) to the tune of ₹ 15,106/- while computing book profit u/s. 115 JB without appreciating the fact that assessee could not prove satisfactorily that own funds were used in buying the investment? 11. Brief facts relating to this issue are that the AO has made disallowance of expenses relatable to exempt income by invoking the provisions of section 14A of the Act read with section 8D of the Rules amounting to ₹ 1,16,788/- i.e. under Rule 8D(2)(iii) at ₹ 1,01,682/- being interest and administrative expenses under Rule 8D(2)(iii) at ₹ 15,106/-. The CIT(A) deleted the addition of interest but sustaining the addition of administrative expenses. Now, before us, the learned Counsel for the assessee stated that the assessee has earned the dividend income of ₹ 19,500/- and disallowance should be restricted to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this appeal of Revenue is against the order of CIT(A) deleting the disallowance of the claim of contribution towards provident fund and ESIC made beyond the respective due date under section 36(i) (va) read with section 2(24(x) of the Act. For this Revenue has raised the following ground No. 5: - 5. Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A) was right in deleting the disallowance of ₹ 69,546/- u/s. 36(1)(va) r.w.s.2(24)(x) of the Act without appreciating the fact that contribution towards Provident Fund made beyond the respective due date?. 14. Brief facts are that the AO disallowed the claim of assessee in regard to payment made on account of employee s contribution to PF and ESIC amounting to ₹ 69,546/-. The CIT(A) deleted the disallowance by noting the actual date of payment. The CIT(A) has reproduced the dates of payments which are as under: - 4(1) For the year under consideration. The Ld. AO has disallowed following payments of employees contribution to PF/ESIC on the basis that the same were made beyond the respective due dates ( and even beyond the grace period) allowed u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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