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TMI Blog2021 (8) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... ible and non-eligible units in view of deduction claimed under the provision of section 80IC - on the basis of allocation of rate of 58.69%, the Assessing Officer has computed an amount of ₹ 27,89,536/- being 58.69% of the financial expenses to 80IC unit - HELD THAT:- During the course appellate proceedings the ld. counsel has neither disproved the findings of the lower authorities nor brought any material on record in contrary to the finding of the lower authority. Therefore, we do not find merit in this ground of appeal of the assessee and the same is dismissed. Disallowance u/s. 36(1)(va) - assessee has not deposited the employee s contribution to ESIC in the employee s account in the relevant fund on or before the due date - HELD THAT:- We consider that the Hon ble Jurisdictional High Court in the case of CIT vs. Gujarat State Road Transport Corporation [ 2014 (1) TMI 502 - GUJARAT HIGH COURT] has held that when the employer has not credited the sum received by it as employees contribution to employees account in relevant fund on or before the due date as prescribed in explanation to section 36(i)(va) the assessee shall not be entitled to deduction. In view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year 2013-14 in all the subsequent assessment years appeal was filed in time. After considering the facts reported by the assessee, it appears, there is reasonable cause for delay in filing the instant appeal by 105 days because of non-receiving of the order of the ld. CIT(A) by the authorized person of the assessee. In the light of the above fact and decision of the Hon ble Supreme Court in the case of Collector Land Acquisition Vs. MST Katgirors Civil Appeal No. 460 of 1987 holding that sufficient cause for the purpose of condonation should be interpreted with a view to do even-handed justice on merit in preference to approach which scuttles a decision on merits, we condone the delay in filing this appeal. ITA No. 1528/Ahd/2017 for A.Y. 2013-14 3. The fact of the case is that assessee filed return of income on 29th Nov, 2013 declaring total income at ₹ 12,28,38,184/-. The case was subject to scrutiny assessment and notice u/s. 143(2) of the Act was issued on 4th Sep, 2014. The assessment u/s. 143(3) of the Act was finalized on 30th December, 2015. Further facts of the case relevant to the issues contested in the appeal are discussed while adjudicating th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was earned. The assessee also furnished tax audit report and relevant annexure of account indicating that investment was made in tax free bonds and mutual fund in earlier years and claimed that because of nature of investment it had correctly computed the amount of disallowance of administrative expenditure. With the assistance of ld. representatives, we have gone though the decision of Co-ordinate Bench of the ITAT Ahmedabad in the case of the assessee for assessment year 2010-11 vide 2334/Ahd/2015 dated 30th Jan, 2019 vide which the disallowance u/s. 14A on account of administrative expenditure was restricted to ₹ 7 lacs after considering the nature of investment made in the form of bonds and securities. The relevant part of the decision of the ITAT is reproduced as under:- 27. We have heard the rival contention and perused the material on record carefully. It is noticed that assessee was having sufficient interest free fund as against the investment made on which exempt income was earned. We have gone through working of disallowance made u/s. 14A r.w. Rule 8D of the I.T. Rule and it is noticed that major part of the disallowance was made by the Assessing Officer to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... page 12 of the assessment order is reproduced as under:- In A.Y. 2012-13 amount of ₹ 5,69,414/- was treated as allocable and accordingly disallowance of deduction u/s. 80IC of this amount was made. During the year there is net allocable bank interest is ₹ 6,24,072/- and bank charges is ₹ 3,13,703/- aggregating ₹ 9,37,775/- and the allocable amount on the basis of ratio of 58,67% it will come to ₹ 5,50,193/- . Accordingly, on the basis of allocation of rate of 58.69%, the Assessing Officer has computed an amount of ₹ 27,89,536/- being 58.69% of the financial expenses to 80IC unit. The same was reduced from the deduction claimed by the assessee u/s. 80IC 9. Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee holding that during the course of appellate proceedings the assessee had not pressed the similar ground of appeal in assessment year 2012-13. 10. Heard both the sides and perused the material on record. During the course appellate proceedings the ld. counsel has neither disproved the findings of the lower authorities nor brought any material on record in contrary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dismissed. 14. In the result, the appeal of the assessee is partly allowed. ITA No. 2870/Ahd/2017 A.Y. 2014-15 Ground No. 1 (a) (Disallowance u/s. 14A of ₹ 43,49,310/-) 15. During the course of assessment, the Assessing Officer noticed that assessee claimed exempt income of ₹ 2,87,28,799/- including dividend income of ₹ 26,63,671/- in the computation of income. The assessee has disallowed a sum of ₹ 12,55,562/- u/s. 14A. The assessee explained that disallowance u/s. 14A was made of ₹ 12,55,562/- in view of interest bearing fund/surplus fund available no further disallowance to be made in the case of the assessee. The Assessing Officer has not agreed with the submission of the assessee and stated that no reason has been furnished for non-allocation of common management expenses. The Assessing Officer has computed the amount of disallowance in accordance in the provision of section 14A(2) r.w.r. 8D to the amount of ₹ 56,04,872/- after reducing the suo moto disallowance made by the assessee of ₹ 12,55,562/- further disallowance of ₹ 43,49,310 was made u/s. 14A of the act and added to the total income of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of ₹ 13,95,100/- was disallowed in view of the specific provision of section 36(1)(va) read with section 2(24)(x) of the Act by the Assessing Officer and added to the total income of the assessee. 20. The ld. CIT(A) has sustained the disallowance following the decision of Jurisdictional Hon ble High Court of Gujarat in the case of CIT vs. Gujarat State Road Transport Corporation (2014) 41 taxman.com 100 (Gujarat) 21. Without reiterating the similar submission of the assessee as mentioned at para 11 of this order while adjudicating the ground of appeal no. 3 of the assessee vide ITA No. 1528/Ahd/2017 for assessment year 2013-14, this ground of appeal of the assessee stands dismissed after applying the finding given at para 13 of this order pertaining to the above referred similar issue and identical facts in the case of the assessee. Therefore, this ground of appeal of the assessee is dismissed. Ground No. 3 (interest u/s. 234A of ₹ 98, 316) 22. This ground of appeal stands dismissed as levying of interest u/s. 234A is mandatory as prescribed in the law. ITA No. 1788/Ahd/2017 A.Y. 2015-16 Ground No. 1 (Disallowance u/s. 14A of ₹ 30,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been made and pleaded that because of nature of investment it has correctly computed the disallowance of administrative expenditure. The Assessing Officer has not made specific reasons for not satisfying the correctness of the claim of the assessee in respect of such expenditure therefore applying the findings of ground of no. 1(d) vide ITA 1528/Ahd/2017 as per para 7 of this order, we are of the view that it would be appropriate to restrict the disallowance on account of administrative expenditure incurred towards earning exempt income to the extent of ₹ 12 lacs as against similar disallowance of ₹ 32,14,661/-made by the Assessing Officer. The Assessing Officer is directed to allow deduction of suo-moto disallowance already made by the assessee. Therefore, this ground of appeal of the assessee is partly allowed. Ground No. 3 (Disallowance u/s. 36(1)(va) of ₹ 292,657/- 27. During the course of assessment, the Assessing Officer noticed that assessee has not deposited the employee s contribution to ESIC in the employee s account in the relevant fund on or before the due date. The detail of such amount was computed by the Assessing Officer at page no. 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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