JCIT, SPECIAL RANGE-1, NEW DELHI vs. ADM AGRO INDS. INDIA P.LTD, NEW DELHI

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ITA 5737/DEL/2017Status: DisposedITAT Delhi05 November 2019AY 2012-133 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that employee's PF contribution deposited before filing the return is allowable. It also upheld the deletion of Section 14A disallowance as no exempt income was earned by the assessee.

What were the facts?

The revenue appealed against the CIT(A)'s deletion of disallowances made by the AO. These disallowances pertained to employee's PF contribution deposited after the due date and expenses under Section 14A.

What were the issues?

Whether employee's PF contribution deposited after the due date but before filing the return is deductible. Whether disallowance under Section 14A is justified when no exempt income is earned.

Which sections of the Income-tax Act were involved?

Section 2(24)(x),Section 36(1)(va),Section 14A

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI

Before: Ms. Sushma ChowlaDr. B. R. R. Kumar

For Respondent: DR &
Hearing: 01.10.2019Pronounced: 05.11.2019

Per Dr. B. R. R. Kumar, Accountant Member:

1.

The present appeal has been filed by the revenue against the order of the ld. CIT(A)-32, New Delhi dated 27.06.2017.

2.

Following ground has been raised by the revenue:

1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the disallowance of Rs.1,09,754/- made by the AO on account of employee’s contribution to PF deposited beyond the ude date u/s 2(24)(x) r.w. section 36(1)(va) of the Income Tax Act, 1961.

2. On the facts and in the circumstances of the cases, the ld. CIT (A) has erred in deleting the disallowance

2 ADM Agro Inds. India Pvt. Ltd. of Rs.1,76,88,619/- made by the AO u/s 14A of the Income-tax Act, 1961 r.w.r 8D of Income-tax Rules.”

3.

Heard the arguments of both the parties and perused the material available on record.

4.

From the records, it is found that the employee contribution to PF has been deposited before filing of the return. The Assessing Officer made disallowance of Rs. 109574/- being the employees contribution towards the PF deposited after the due date u/s 2(24)(x) read with section 36(1)(va) of the I.T. Act, 1961. It was argued by the Ld. AR that the amounts have already been deposited before filing of the Income Tax Return on 9.11.2011 and 05.04.2012. Since, the amounts have already been paid before filing of the return as provided under section 36(1)(va) the Income Tax Act and keeping in view the judgment of Hon’ble High Court in the case of CIT Vs AIMLI Ltd. 321 ITR 508, wherein the Hon’ble High Court allowed the deduction of payment of employees contribution towards the PF before filing of the return, the appeal of the revenue is hereby dismissed.

5.

Ground No. 2 deals with disallowance of Rs. 176,88,619/- made by the Assessing Officer u/s 14 of the Income Tax Act read with Rule 8D of the Income Tax Rules. The average value o the investments determined by the Assessing Officer was Rs. 81,40,52,960/- and average value of the assets Rs. 4,21,36,40,419/-. It was argued by the Ld. AR that no exempt income has been earned by the assessee during the year. The revenue has not disputed the factual position. Hence, keeping in view the judgment of Hon’ble Delhi High Court in the case Cheminvest Ltd. Vs CIT in dated 02.09.2015, we hereby decline to interfere with the order of the ld. CIT (A) in deleting the addition made u/s 14A.

3 ADM Agro Inds. India Pvt. Ltd.

6.

In the result, the appeal of the revenue is dismissed.

Order Pronounced in the Open Court on 05/11/2019

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