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TMI Blog2024 (3) TMI 820X X X X Extracts X X X X X X X X Extracts X X X X ..... produce the copy of the resolution of the Board of Directors approving the treatment of the Chairman of the company in USA and also file the copy of the ITR of the Chairman wherein such amount has been admitted to tax as perquisites. Thus we deem it proper to restore the issue to the file of the AO with a direction to grant more opportunity to the assessee to file the requisite details to his satisfaction and decide the issue as per fact and law - Grounds No.1 to 3 raised by the assessee are accordingly allowed for statistical purposes. Belated deposit of employee s contribution to PF - HELD THAT:- Issue which has now been settled by the decision of the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd [ 2022 (10) TMI 617 - SUPREME COURT] wherein it has been held that the employee s contribution to PF ESI, if not remitted before the due dates mentioned in the respective Act, cannot be allowed as a deduction. Assessee also fairly conceded that the above issue stands decided against the assessee by the decision of the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd vs. CIT (Supra). Accordingly, this ground raised by the assessee is dismissed. Add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,030/- wherein he made the following additions: A) Disallowance u/s 40(a)(ia) - Rs. 2,01,240 B) Disallowance of personal expenses Rs. 14,63,993 C) Interest paid on customs duty - Rs. 1,83,00,000 D) Delayed payment of employees Contribution to PF - Rs. 72,94,624 E) Duty drawback on export - Rs. 2,74,437 3. In appeal, the learned CIT (A) NFAC granted part relief to the assessee. 4. Aggrieved with such order of the learned CIT (A) NFAC giving part relief, the assessee as well as the Revenue are in appeal before the Tribunal by raising the following grounds: A) Grounds raised by the assessee: 1) The order of the learned CIT (A) is against the law, weight of evidence and probabilities of case. 2) The learned CIT erred in confirming the addition of Rs. 14,63,993/- which was incurred towards the medical expenditure of one of the Director inspite of submission that the same is approved by the Board resolution of the company. 3) The learned CIT (A) erred in confirming the addition of Rs. 14,63,993/- incurred by the company towards medical expenditure of the Director. 4) The learned CIT (A) erred in disallowing an amount of Rs. 72,94,624/- which was paid during the financial year relevant t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Chairman of the company in USA for an amount of Rs. 14,63,990/-. We find in absence of any further details filed before the learned CIT (A) NFAC, the learned CIT (A) NFAC upheld the action of the Assessing Officer. The learned Counsel for the assessee referred to the certified copy of the Bozard Resolution and copy of Form 16 filed in the paper book and requested for admission of the same as additional evidence. He submitted that given an opportunity, the assessee is in a position to produce the copy of the resolution of the Board of Directors approving the treatment of the Chairman of the company in USA and also file the copy of the ITR of the Chairman wherein such amount has been admitted to tax as perquisites. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant more opportunity to the assessee to file the requisite details to his satisfaction and decide the issue as per fact and law. Needless to say, the Assessing Officer shall give due opportunity of being heard to the assessee. We hold and direct accordingly. The first issue raised in Groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of Rs. 1,83,00,000/- paid is on account of customs duty along with interest and is in the nature of business expenditure and not penalty. Accordingly, it was claimed that the assessee is eligible to claim the same as business expenditure u/s 37(1) or 43B of the I.T. Act. 14. However, the Assessing Officer was not satisfied with the arguments advanced by the assessee. According to him, the assessee had defaulted in payment of customs duty which is an offence and only on the direction of the Hon'ble Supreme Court, the assessee has paid customs duty along with interest of Rs. 1,83,00,000/- . Had the assessee paid the customs duty in time, the interest expenditure would not have arrived. Since the interest expenditure of Rs. 1,83,00,000/- is not at all relate to the business, the Assessing Officer disallowed the same and added back to the total income of the assessee. 15. In appeal, the learned CIT (A) NFAC following the decision of the Hon'ble Supreme Court in the case of Mahalakshmi Sugar Mills Co. vs. CIT (123 ITR 0429) deleted the addition by observing as under: Ground No.3 is directed against disallowance of interest paid or custom duty amounting to Rs. 1,83,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of the assessee vide Civil Appeal No.4444-4445 of 2005 dated 31.07.2015 has observed as under: 14) In the present case, advance licence was issued to the assessee in terms of para 7.4 of the EXIM Policy 1997-2000. It was in terms of this licence that the import of the specified material was permitted on the condition that the assessee is obligated to meet the export obligation as contained in the licence issued by the DGFT. No doubt, this obligation in the export licence, read with conditions contained in Notification No. 30/1997, puts the onus upon the assessee to make the exports of the products produced from the material so imported. However, it is the case of the assessee that for certain bona fide reasons (as the bona fides of the assessee have been accepted by the DGFT), as the assessee was not able to export same very goods produced by it from the material imported on which he was given exemption from payment of the import duty, the DGFT allowed the assessee to meet the export obligation through third party. 15) It is also correct that insofar as DGFT is concerned, it has passed Order-in-Original dated 03.08.2011 holding that the export through third party would ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue was altogether different which has no bearing on the controversy involved in the present case. 19) Since the conditions of the exemption notification are not fulfilled and the law requires strict compliance of the exemption notification, the assessee becomes liable to pay the import duty which was payable, but for the benefit of exemption Notification No 30/1997, which was obtained by the assessee. 20) Though we have rendered this decision keeping in view the legal position discussed above, at the same time, we deem it necessary to observe that the Government should bestow its consideration and make appropriate provision dealing with such situations. After all, the Exemption Notification No. 30/1997 has been issued to implement and effect the EXIM Policy provisions. Therefore, the purport of the exemption notification is to advance the objectives of the EXIM Policy. When the DGFT has itself accepted the benefits of the assessee and carried out the amendment in the import licence and further that the assessee could make the exports on the basis of the amendment; albeit through third party, such person should not be left high and dry. Therefore, necessary amendments are needed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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