INDO AMINES LTD,DOMBIVALI vs. ASST CIT CIR 1, KALYAN

This appeal is filed by the assessee against the order of the Ld.CIT(A) in sustaining the action of the Assessing Officer in rejecting the claim of the assessee for treating the payment of self-assessment tax after the due date for filing return but before the date of order u/s. 143(1) / 143(3) of the Act for the purpose of calculation of levy of interest u/s. 234B of the Act.

Ld. Counsel for the assessee referring to the order passed u/s. 154 of the Act by the Assessing Officer submitted that up to the date of filling of return i.e. 28.09.2012 assessee paid advance tax of Rs. 90 Lakhs and self-assessment tax of Rs. 40 Lakhs and thereafter an amount of Rs.96,88,080/- was paid on various dates from 28.02.2013 to 31.01.2013 and these payments were considered as self-assessment tax by the

Ld. Counsel for the assessee submitted that the action of the Assessing Officer in rejecting the assessee claim has been sustained by the Ld.CIT(A). Submissions made before the lower authorities have been reiterated before us. Ld. Counsel for the assessee placed reliance on the decision of the Ahmadabad Bench in the case of Patson Transformers Ltd v. DCIT [(2006) 6 SOT 673] and the decision of the Hon’ble Delhi High Court in the case of Dr. Prannoy Roy & Another v. CIT [254 ITR 755]. The calculation sheet is also furnished before us. According to the assessee the interest u/s. 234B of the Act should have been charged considering the amounts paid even after filing of return of income.

We have heard the rival submissions, perused the orders of the Authorities below. On a careful consideration of the orders passed by the authorities below and the submissions of the assessee and the decision of the Ahmadabad Bench, we find that some force in the submissions of the assessee, therefore, we restore this issue to the file of the Assessing Officer to examine the contention of the assessee with reference to the decision of the Ahmadabad Bench in the case of Patson Transformers Ltd v. DCIT (Supra) and the decision of the Hon’ble Delhi High Court in the case of Dr. Prannoy Roy & Another v. CIT (supra) and the calculation

Assessee in its appeal has raised the following grounds: - “

Ld. DR vehemently supported the orders of the Authorities below.

The Bombay High Court in the case of CIT v. Ghatge Patil Transports Limited (supra) held that deduction for payment of employee’s contribution cannot be disallowed in any case contribution to employee’s welfare fund was made on or before for filling return of income. Respectfully following the same, we allow the ground raised by the assessee.

Ground Nos.2 & 3 are with reference to addition / disallowance made u/s. 41(1) of the Act.

Brief facts are that the Assessing Officer while completing the assessment noticed that there are outstanding liabilities towards certain creditors for the period of more than three years and since these amounts have already been claimed as deduction by the assessee in earlier years on accrual basis, the Assessing Officer was of the view that there was no reason to claim the same as a liability even after a period for lodging a claim by creditors had lapsed. Therefore, by invoking the provisions of section 41(1) of the Act the Assessing Officer brought to tax an amount of Rs.32,45,939/-. Before the Ld.CIT(A), it was contended by the assessee

Before us, the Ld. Counsel for the assessee reiterated the submissions made before the Ld. CIT(A).

Ld. DR vehemently supported the orders of the Authorities below.

On a perusal of the Ld. CIT(A) order, we find that in spite of taking note of the fact that the assessee had offered and return back the sundry creditors to the extent of Rs.26,92,100/- during the F.Y. 2013-14 relevant to the Assessment year 2014-15, the Ld. CIT(A) still went on to confirm the addition which in our view is not at all justified. The observation of the Ld. CIT(A) in sustaining the addition was that the assessee has offered

The Hon'ble Supreme Court in the case of CIT v. Sugauli Sugar Works Pvt. Ltd., [236 ITR 518] held that even if the assessee made unilateral write off still the liability does not seize to exist. The Hon'ble Supreme Court further observed as under: - “The principle that expiry of the period of limitation prescribed under the Limitation Act could not extinguish the debt but it would only prevent the creditor from enforcing the debt, has been well settled. If that principle is applied, it is clear that mere entry in the Books of Account of the debtor made unilaterally without any act on the part of the creditor will not enable the debtor to say that the liability has come to an end. Apart from that, that will not by itself confer any benefit on the debtor as contemplated by the section.”

Before us nothing has been brought on record by Assessing Officer to suggest that the liability is seized. In the circumstances, we hold that there is no cessation of liability of creditor in this Assessment year. Therefore, we direct the Assessing Officer to delete the addition made u/s. 41(1) of the Act.

Appeal of the assessee is partly allowed.

The assessee has raised the following grounds in its appeal: - “(1) "On the facts and in the circumstances of the case & in law the learned Assessing Officer has erred in disallowing and the learned CIT(A) has erred in confirming the addition of Rs. 65522/- on account of employees contribution of EPF deposited in EPF by the appellant before the due date of filing of the return. (2) "On the facts and in the circumstances of the case & in law the learned Assessing Officer has erred in adding to the income of the appellant and the 8 1388 & 1389/MUM/2017 M/s. Indo Amines Ltd. learned ClT(A)has confirming the ad hoc disallowance of Rs.330000/- out of office expenses.”

First ground is with regard to disallowance of employees Contribution to EPF which was paid before due date for filing of return of income. This ground is squarely covered by the decision of the Hon’ble Bombay High Court in the case of CIT v. Ghatge Patil Transports Limited (supra). Respectfully following the same, we allow the grounds of appeal of the assessee.

We have heard the rival submissions, perused the orders of the Authorities below. The Assessing Officer has not pointed out any specific defect with respect to any particular voucher or expenditure. It is only a general observation made by the Assessing Officer. We find no justification in making adhoc disallowance without specifically pointing the defect on particular item of expenditure. Hence the same is deleted. Thus, we direct the Assessing Officer to delete the adhoc disallowance made.