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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
O R D E R
PER MAHAVIR SINGH, JM:
This appeal by the Revenue is directed against the order of the CIT (A)-31, Mumbai passed in appeal No.CIT (A)-31/IT-127/ACIT-20(1)/12-13 dated 25-09-2014. Assessment was framed by the ACIT, Circle- 20(1), Mumbai for assessment year 2010- 11 vide his order dated 08-11-2012 u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).
The first issue in this appeal of the assessee is as regards to the order of the CIT (A) confirming the action of the AO in making ad-hoc disallowances of travelling & conveyance expenses and telephone charges @15% in each of the case i.e. amounting to Rs.79,140/- and Rs.45,752/-.
I have heard the learned Sr. DR and gone through the facts of the case. I find from the case records that the assessee has claimed travelling and conveyance expenses at Rs.5,27,598/- and telephone charges at Rs.3,05,014/-. The AO disallowed 15% of each of the expenses i.e. travelling & conveyance at Rs.79,140/- and telephone charges at Rs.45,752/-. The AO disallowed travelling & conveyance expenses for the reasons that vouchers are not properly made and telephone charges for the reason that same are for personal user. The CIT (A) also confirmed the action of the AO. I have examined the case records and find that these are purely on ad-hoc disallowances and no reason is adduced for making the disallowance as is evident from the assessment order. The disallowances can only be sustained if there is reason for the same. Accordingly I delete both the disallowances and these two issues of the assessee’s appeal are allowed.
The next issue in this appeal of the assessee is against the order of the CIT (A) confirming the disallowance of Rs.1,39,665/- and Rs.2,35,583/- on account of employees’ contribution towards ESI and PF respectively as not paid within the prescribed due date and also u/s 43B of the Act.
I have heard the learned Sr. DR and gone through the facts of the case. I find from the details filed in assessee’s paper book that the details of ESI and PF are made within the due date of filing of return of income. It is found that the last payment of PF and ESI was made by the assessee on 27-04-2010 and all other are prior to this date. The assessee’s due date of filing of return was 30-09-2010 u/s 139(1) of the Act and this date was extended to 15-10-2010 for the relevant assessment year 2010-11. In view of this fact that these payments are made much before the due date of filing of return of income, the issue is covered in favour of the assessee by the decision of the Hon’ble Calcutta High Court in the case of CIT Vs Vijay Shree Ltd. 224 Taxman 12 (Cal). Since, the issue is covered and the payments are made within the due date of filing of return by the assessee in respect to PF and ESI, the assessee is entitled for claim of deduction u/s 43B of the Act. Accordingly, I allow the claim of the assessee.