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TMI Blog2022 (8) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus, the ground raised by the Revenue is dismissed. Disallowance of delayed payment of EPF and ESI dues - HELD THAT:- We find that the ld. CIT(A) has rightly followed the decision in the case of CIT v. Industrial Security Intelligence India Pvt. Ltd. [ 2015 (7) TMI 1063 - MADRAS HIGH COURT] as well as decision of CIT v. Alom Extrusions Ltd. [ 2009 (11) TMI 27 - SUPREME COURT] in directing the Assessing Officer to allow the deduction to the extent payments are made within due date of filing of return of income. Thus, the ground raised by the Revenue is dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rule 46A of the Income Tax Rules. 4. On the other hand, the ld. Counsel for the assessee supported the order of the ld. CIT(A). 5. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. The assessee has claimed a sum of ₹.4,71,52,666/- as guarantee fees paid to its holding company M/s. Daechang Seat Co. Ltd., Korea at the rate of 1.4% of loan amount received. On verification of the details furnished by the assessee, the Assessing Officer has observed the assessee has claimed certain amounts under the head Guarantee Fees on loans already closed during the earlier previous year or on those loans not pertaining to the current year. The total amount of such excess Guarantee Fees paid over and above the proportion calculated as per the Guarantee Agreement is a sum of ₹.2,20,38,517/- as per assessee's own admission vide letter dated 22.12.2017. Accordingly, the Assessing Officer disallowed the same and brought to tax. On appeal, after considering the evidences furnished by the assessee regarding the incurring of expenses and the details regarding the deduction of tax on the said expenses, the ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Guarantee Fee & allow the guarantee fee in the Financial Year 2014-15 itself". The Appellant prayed that the addition on account of excess claim of guarantee fee should be deleted and the guarantee fee claimed by the appellant in the F.Y. 2014-15 itself should be allowed. 4A(1) CIT(A)'s inference and decision: The submissions of the appellant were considered vis-a-vis the findings of the Assessing Officer. The appellant's claim of guarantee fee was considered to be an excessive claim by the A.O. It was also stated to be inadmissible u/s. 37(1) of the Act since the appellant had not been able to prove that the same had been incurred wholly and exclusively for the purpose of business. It was maintained that the appellant was following the mercantile system of accounting and had to claim the expenses whenever they accrued to the appellant and not when they were paid or actually realised. The A. O declared that the appellant cannot change the method of accounting to claim expenses of an earlier accounting period as and when it decides to do so. During the appellate proceedings, the appellant furnished a copy of the Guarantee Agreement entered into with the holding company, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence: "(4) Nothing contained in this rule shall affect the power of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the Assessing Officer) under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 271." 5.2 Admittedly, in this case, the ld. CIT(A) has not entertained any fresh material for adjudication of the issue. The TDS on guarantee fee paid by the assessee was very much produced before the Assessing Officer and the Assessing Officer, without considering its entirety, extracted half portion in one page and half portion in another page and made the addition. Moreover, under section 251(1)(a) of the Act, the powers of the first appellate authority are coterminous with those of Assessing Officer, considering the facts and circumstances of the case, we are of the considered opinion that the ld. CIT(A) has rightly assumed the jurisdiction to conclude the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer to allow deduction to the extent payments are made within due date of filing of return of income. 10. So far as the case law relied on by the ld. DR in WP No. 5264 of 2018 dated 23.10.2018 is concerned, we find that it is a Single Judge decision, which was subsequently, vide order dated 09.01.2019 in W.P. No. 2854 of 2018 & CMP 23727 of 2018 in the case of M/s. Unifac Management Services (India) Pvt. Ltd. v. DCIT, the assessee was permitted to withdraw the writ petition namely W.P. No. 5264 of 2018 as well as W.P. No. 2854 of 2018 by the Division Bench of the Hon'ble Madras High Court. Hence the case law relied on by the ld. DR has no legs to stand. 11. In view of the above facts and circumstances, we find that the ld. CIT(A) has rightly followed the decision in the case of CIT v. Industrial Security & Intelligence India Pvt. Ltd. (supra) as well as decision of the Hon'ble Supreme Court in the case of CIT v. Alom Extrusions Ltd. (supra) in directing the Assessing Officer to allow the deduction to the extent payments are made within due date of filing of return of income. Thus, the ground raised by the Revenue is dismissed. 12. In the result, the appeal filed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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