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Income Tax Appellate Tribunal, MUMBAI BENCHES “A”, MUMBAI
Before: Shri Mahavir Singh, JM & Shri Ramit Kochar, AM
आदेश / O R D E R
Per Mahavir Singh, JM :
This appeal by the assessee arising out of order of Commissioner of Income-tax (Appeals)-38, Mumbai in appeal No.CIT(A)-38/IT-160/2012-13 dated 11.04.2014. The assessment was framed by Addl.CIT, Range 6(3), Mumbai for the assessment year 2008-2009 vide his order dated 29.12.2010 u/s 143(3) of the Income-tax Act, 1961 (hereinafter “the Act”).
The first issue in this appeal of assessee is against the order of the CIT(A) confirming partly the addition made by the A.O. by disallowing adhoc expenses.
We have heard rival contentions and gone through the facts and circumstances of the case. Brief facts are that the assessee is engaged in . M/s.Loha Ispaat Limited. the business of processing hot rolled coils / plates, cold roll coils etc. The assessee claimed expenses on account of carriage inwards, carriage outwards, octroi, staff welfare, conveyance and travelling expenses, printing and stationary, miscellaneous expenses etc. amounting to Rs.2,57,35,636. The details are as under:-
(i) Carriage Inwards Rs. 92,76,954 (ii) Staff Welfare Expenses Rs. 4,66,248 (iii) Conveyance and Travelling Expenses Rs. 15,72,022 (iv) Printing and stationary Rs. 4,62,214 (v) Miscellaneous expenses Rs. 3,55,394 (vi) Carriage outwards, Octroi etc. Rs.1,36,02,804 ------------------- Total Rs.2,57,35,636 ===========
The Assessing Officer noted that the assessee could not produce proper vouchers and produced self-made vouchers qua these expenses. The A.O., in the absence of proper evidences, estimated the disallowance at Rs.7,00,000 on adhoc basis. Aggrieved, the assessee preferred appeal before CIT(A), who restricted the disallowance at Rs.4,00,000 by observing that the A.O. in the assessment order could not bring out clearly to what extent the vouchers are self-made and which item is disallowable. According to CIT(A), the assessee has also paid fringe benefit tax on some of the expenses. Considering over all facts, the CIT(A) deleted the addition of Rs. 3 lakh and restricted the addition of Rs.4 lakh. Aggrieved now, assessee is in second appeal before the Tribunal.
We have gone through the facts and noticed that the Assessing Officer has made disallowances of expenses on estimated basis, i.e., purely on . M/s.Loha Ispaat Limited. adhoc. The Assessing Officer could not point out what are the defects in the expenses or the expenses are excessive. Before us, the assessee specific ally pointed out that the authorities below could not point out any specific defect in the expenses claimed so as to main adhoc disallowances. The learned Counsel for the assessee relied on the decision of the Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v. CIT [(1954) 26 ITR 775 (SC)]. The learned Counsel for the assessee stated that the disallowance is excessive and it can be reduced to Rs.2 lakh. In view of the above concession given by the learned Counsel, we are of the view that a reasonable disallowance of Rs.2 lakh will meet the ends of justice and hence we delete the balance Rs.2 lakh. This ground is partly allowed.
The next issue in this appeal of assessee is against the order of the CIT(A) confirming disallowance of Provident Fund payment of Rs.82,554 being belated payment but actually these were paid before the due date of filing of return of income u/s 139(1) of the Act.
After hearing both the sides, we find that the Assessing Officer has recorded the factum of date of payment of employees’ contribution, which read as under:- Due date of payment Employees’ Contribution Date of payment (Rs.) 15.09.2007 4,745 + 637 08.20.2007 15.10.2007 8,904 + 1,083 03.11.2007 15.11.2007 15,603 + 2,093 26.11.2007 15.12.2007 8,708 + 1,057 30.01.2008 15.01.2008 8,982 + 1,094 30.01.2008 15.02.2008 9,006 + 1,743 23.02.2008 15.03.2008 8,455 + 1,134 05.04.2008 15.04.2008 8,288 + 1,002 21.04.2008 Total 82,554
. M/s.Loha Ispaat Limited. 7.1 From the above chart, it is clear that the payments made by the assessee are made within the due date of filing of return of income u/s 139(1) of the Act. Once employees’ contribution to PF noted above not paid before statutory date as prescribed under the respective Acts, but paid before the due date of filing of return of income u/s 139(1) of the Act, the same is allowable. This view of ours is supported by the decision of the Hon’ble Bombay High Court in the case of CIT v. Ghatge Patil Transports Ltd. [(2014) 368 ITR 749 (Bom.)].
7.2 Respectfully following the decision of the Hon’ble Bombay High Court, we direct the A.O. to delete the disallowance and this issue of the assessee’s appeal is allowed.
In the result, the appeal of the assessee is partly allowed.