RAJRATNA METAL INDUSTRIES LTD.,AHMEDABAD vs. THE ADDL.CIT, RANGE-5, NOW RANGE-3(1), AHMEDABAD

The assessee’s first substantive grievance challenges both the lower authorities’ action disallowing/adding a sum of Rs.92,175/- u/s.14A r.w. Rule 8D of the Income Tax Rules. Both the lower authorities are of the opinion that the assessee’s investment involved at least this much expenditure in earning its exempt dividend income. The case file however indicates that the assessee has not derived any such exempt income in the impugned assessment year. We therefore quote hon’ble jurisdictional high court’s decision in CIT vs. Corrtech Energy P. Ltd, reported in [2015] 372 ITR 97 (Guj.) holding that Section 14A read with computation provision enshrined in Rule 8D does not apply in absence of any exempt income in relevant previous year. We therefore quote the above judicial precedent to delete the impugned disallowance of Rs.92,175/-.

Assessee’s latter substantive ground challenges correctness of both the lower authorities’ action disallowing/adding a sum of Rs.3,85,810/- u/s. 36(1)(va) r.w.s. 2(24) of the Act on account late payment of employees’ contribution to PF & ESI in question. There is no dispute that hon’ble jurisdictional high court’s decision in CIT vs. Gujarat State Road Transport Corporation (2014) 366 ITR 170 (Guj) upholds such a disallowance in principle. The assessee’s case however is that relevant due date has to be seen not from the relevant month of salary but the one pertaining to its payment. He then files a computation chart indicating it to have paid above employees’ PF/ESI contributions on 22.05.2009 and 28.05.2009 as against the due dates thereof following on 20.06.2009. The Revenue fails to dispute this factual position. We therefore quote this tribunal’s co-ordinate bench decision in Kanoi paper & Industries Ltd. vs. ACIT 75 TTJ 448 that the relevant date in such case is that of month of the actual payment of wages/salaries. We therefore rely on the

This assessee’s appeal is accordingly allowed.