The Dy. CIT., Circle-1(1)(1), Ahmedabad V. M/s. Astral Polytechnik Ltd., Ahmedabad

ITA 2235/AHD/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6362 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 31-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Diversion of income; Earning of tax free income; Question of law; Assessment record; Rule 8D
• Section: 43B; 143(3); 14A; 250; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO.2235/AHD/2016 (ASSESSMENT YEAR : 2013-14) DCIT, CIRCLE 1(1)(1), AHMEDABAD. VS. ASTRAL POLYTECHNIK LTD., 207/1, ASTRAL HOUSE, B/H RAJPATH CLUB S. G. HIGHWAY, AHMEDABAD 380 059. AND CO NO. 160/AHD/2016 (IN ITA NO.2235/AHD/2016) (ASSESSMENT YEAR : 2013-14) ASTRAL POLYTECHNIK LTD., 207/1, ASTRAL HOUSE, B/H RAJPATH CLUB, S. G. HIGHWAY, AHMEDABAD 380 059. VS. DCIT, CIRCLE 1(1)(1), AHMEDABAD. [PAN NO. AABCA 2951 N] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI VINOD TANWANI, SR. D.R. RESPONDENT BY : MS. IRA KAPOOR, A.R. DATE OF HEARING 08.02.2019 DATE OF PRONOUNCEMENT 06.05.2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 29.06 .2016 PASSED BY THE ITA NO.2235/AHD/2016 & CO NO.160/AHD/2016 ASTRAL POLYTECHNIK PVT. LTD. ASST.YEAR 2013-14 - 2 - COMMISSIONER OF INCOME TAX (APPEALS)-1, AHMEDABAD U NDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ARISI NG OUT OF THE ORDER DATED 15.03.2016 PASSED BY THE DEPUTY COMMISSIONER OF INC OME TAX, CIRCLE 1(1)(1), AHMEDABAD FOR THE ASSESSMENT YEAR 2013-14 WITH THE FOLLOWING GROUNDS: I. THAT THE LD CIT(A) ERRED IN LAW AND ON FACTS IN DE LETING THE ADDITION OF RS.5,22,55,026/- MADE ON ACCOUNT OF DIS ALLOWANCE OF DEDUCTION U/S 80IC OF THE ACT. II. THAT THE LD CIT(A) ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.1,15,41,900/- MADE ON ACCOUNT OF REJECTING TH E ACCOUNTING POLICY FOR ALLOCATION OF INTEREST EXPENSES. III. THAT THE LD CIT(A) ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.3,64,326/- MADE ON ACCOUNT OF DISALLOWANCE U/ S 14A R.W. RULE 8D OF THE ACT. 2. GROUND NO.1: THE REVENUE HAS CHALLENGED THE ORDER PASSED BY THE LEARNED CIT(A) IN DELETING THE ADDITION OF RS.5,22, 55,026/- MADE ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S 80IC OF THE ACT. 3. THE ASSESSEE-COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF PVC / CPVC PIPES AND FITTINGS, FILED ITS ORIGINAL RETURN OF INCOME ON 29.11.2013 DECLARING TOTAL INCOME AT RS.58,33,35,86 0/-, WHICH WAS PROCESSED U/S 143 OF THE ACT. SUBSEQUENTLY, UNDER SCRUTINY NO TICE U/S 143(2) DATED 04.09.2014 FOLLOWED BY A FURTHER NOTICE U/S 143(2) R.W.S. 129 DUE TO CHANGE OF INCUMBENT ALONG WITH QUESTIONNAIRE DATED 30.06.2015 WAS SERVED UPON THE ASSESSEE. UPON PERUSAL OF THE COMPUTATION OF INCOME DURING THE COURSE OF ASSESSMENT PROCEEDING, IT WAS FOUND THAT THE ASSESS EE CLAIMED A SUM OF RS.17,88,05,425/- AS DEDUCTION U/S 80IC OF THE ACT FOR ITS UNIT AT BADDI, HIMACHAL PRADESH (8 TH YEAR), BEING 30% OF THE PROFIT OF THE UNIT. THE TU RNOVER OF THE ASSESSEE UNIT IN TERMS OF THE P&L ACCOUNT WA S SHOWN AT RS.1,40,45,66,296/- FOR THAT PARTICULAR UNIT. THE T OTAL TURNOVER OF THE COMPANY ITA NO.2235/AHD/2016 & CO NO.160/AHD/2016 ASTRAL POLYTECHNIK PVT. LTD. ASST.YEAR 2013-14 - 3 - WAS AT RS.82,108.79 LACS. THE PROFIT CLAIMED BY THE ASSESSEE FOR BADDI UNIT AND AHMEDABAD UNIT WORKED OUT AS UNDER: AHMEDABAD BADDI ASSESSEE COMPANY- WHOLE TURNOVER 6806312704 1404566296 8210879000 BOOK PROFIT 197052750 582093250 779146000 %AGE OF PROFITS TO TURNOVER (PBT) 2.89 41.44 9.49 CLAIM U/S 80IC 178805425 178805425 THE LEARNED AO FOUND THAT THE ASSESSEE HAS SHOWN A BNORMALLY HIGH PROFITS FOR THE BADDI UNIT @ 41.44% OF THE TOTAL TU RNOVER AS COMPARED TO AHMEDABAD UNIT WHICH IS ENGAGED IN THE MANUFACTURE OF SIMILAR LINE OF PRODUCTS. A SHOW-CAUSE DATED 26.02.2016 WAS ISSUED UPON THE ASSESSEE DIRECTING TO ADDRESS AS TO WHY THE CLAIM U/S 80IC O F THE ACT SHOULD NOT BE RESTRICTED TO THE PROFITS DERIVED FROM MANUFACTURIN G ACTIVITIES UNDERTAKEN IN BADDI UNIT IN THE SAME MANNER AS WAS DONE IN A.Y. 2 007-08, 2008-09, 2009- 10, 2010-11, 2011-12 & 2012-13. ULTIMATELY, THE EXP LANATION RENDERED BY THE ASSESSEE WAS NOT FOUND TENABLE BY THE LEARNED AO AN D HE THUS DISALLOWED RS. 5,22,55,026/- IN THE MANNER AS FOLLOWS: 2.5 THE CONTENTION OF THE ASSESSEE HAS BEEN CONSI DERED AND NOT FOUND TO BE TENABLE AS THE ASSESSING OFFICER HAS RIGHTLY TAK EN GROSS PROFIT AS THE BASE FOR WORKING OUT THE PROFITS ATTRIBUTABLE TO BRAND V ALUE AND MARKETING NETWORK AND THE PROFITS SO ATTRIBUTABLE TO THE BRAND VALUE AND MARKETING NETWORK HAVE BEEN RIGHTLY REDUCED FROM THE DEDUCTION CLAIMED BY THE ASSESSEE-COMPANY U/S. 80IC OF THE ACT AS DEDUCTION CANNOT BE ALLOWED ON P ROFITS NOT DERIVED FROM MANUFACTURING ACTIVITIES AS PER THE PROVISIONS OF S ECTION 80IC OF THE ACT. THUS, THE CONTENTION OF THE ASSESSEE IS FALLACIOUS AND UNTENABLE. IN VIEW OF THE ABOVE, IT IS HELD THAT 5% OF THE PROFITS ARE DERIVE D FROM THE BRAND VALUE AND FURTHER, 35% PROFITS HAVE BEEN DERIVED FROM MARKETI NG ACTIVITIES. NO. NARRATION AMOUNT 1 SALES OF THE BADDI UNIT 1,40,45,66,296 ITA NO.2235/AHD/2016 & CO NO.160/AHD/2016 ASTRAL POLYTECHNIK PVT. LTD. ASST.YEAR 2013-14 - 4 - 2 INCREASE IN STOCK OF FINISHED GOODS 2,29,10,381 3 TOTAL TURNOVER ROW (1+2) 1,42,74,76,677 4 GROSS PROFIT 71,35,31,011 GROSS PROFIT IN % 49.99% 5 PERCENTAGE PROFITS ATTRIBUTABLE TO TAX BENEFITS AVAILABLE AT BADDI ( AS PER THE DISCUSSION) % 19.48% 6 PERCENTAGE PROFITS SHOWN BY THE UNIT EXCLUDING THE TAX BENEFITS 30.51% 7 PERCENTAGE PROFITS DERIVED FROM BRAND VALUE 85 MARKETING ((35+5)40% OF 6) 12.20% 8 PROFIT DERIVED FROM BRAND VALUE & MARKETING AT BADDI UNIT = ROW (3*7) 17,41,83,422 DISALLOWANCE PROFIT DERIVED FROM BRAND VALUE & MARKETING AT BADDI UNIT = ROW 30% * (3*7) 5,22,55,026 ALLOCATION OF INTEREST EXPENSES 0 TOTAL DISALLOWANCE 5,22,55,026 ACCORDINGLY, THE DISALLOWANCE OF RS.5,22,55,026/- I S MADE U/S 80IC OF THE ACT. IN APPEAL, THE LEARNED CIT(A) RELYING UPON THE ORDE R PASSED BY THE HONBLE ITAT IN ASSESSEES OWN CASE FOR A.Y. 2007-0 8 DELETED SUCH DISALLOWANCE. HENCE, THE INSTANT APPEAL FILED BY TH E REVENUE BEFORE US. 4. AT THE TIME OF HEARING OF THE INSTANT APPEAL, TH E LEARNED ADVOCATE APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ORDER PASSED BY THE LEARNED ITAT IN REVENUES APPEAL FOR A.Y. 2007-08 I N UPHOLDING THE ORDER PASSED BY THE LEARNED CIT(A) BY DELETING DISALLOWAN CE WAS CHALLENGED BEFORE THE JURISDICTIONAL HIGH COURT BY THE DEPARTMENT WHI CH IN TURN WAS DISMISSED BY ITS ORDER DATED 17.07.2017 IN TAX APPEAL NO.481 OF 2017 AFFIRMING THE ORDER PASSED BY THE CO-ORDINATE BENCH IN FAVOUR OF THE ASSESSEE. FURTHER THAT, ITA NO.2235/AHD/2016 & CO NO.160/AHD/2016 ASTRAL POLYTECHNIK PVT. LTD. ASST.YEAR 2013-14 - 5 - THE CO-ORDINATE BENCH OF THIS TRIBUNAL RELYING UPON THE SAID ORDER PASSED BY THE HONBLE TRIBUNAL DISMISSED THE APPEAL PREFERRED BY THE REVENUE ON THE SIMILAR GROUND FOR A.Y. 2008-09 WHICH WAS ULTIMATEL Y UPHELD BY THE HONBLE JURISDICTIONAL HIGH COURT. HOWEVER, LEARNED DR FAIL ED TO CONTROVERT THE CONTENTION MADE BY THE LEARNED AR. 5. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEVA NT MATERIALS AVAILABLE ON RECORD. WE HAVE TAKEN INTO CONSIDERATION OF THE ORD ER PASSED BY THE LEARNED CIT(A). THE RELEVANT PORTION THEREOF IS AS FOLLOWS: 5. BEFORE US, LD.SR.DR SUPPORTED THE ORDER OF THE AO. ON THE OTHER HAND, LD.AR(S) REITERATED THE SUBMISSIONS MADE BEFORE THE AO AND LD.CIT(A). HE SUBMITTED THAT THE BOOKS OF ACCOUNT OF BADDI UNIT A RE AUDITED AND NO DEFECT HAS BEEN POINTED OUT BY THE AUDITORS AND THEREFORE NO ADJUSTMENTS TO THE PROFITS OF BADDI UNIT COULD HAVE BEEN UNDERTAKEN BY AO. HE FURTHER SUBMITTED THAT THE CLAIM OF DEDUCTION U/S.80IC OF THE ACT FOR THE IMPUGNED YEAR WAS SECOND YEAR OF CLAIM AND THAT THE ASSESSEE HAD ALSO CLAIMED DEDUCTION U/S.80IC OF THE ACT IN AY 2006-07 AND THE CLAIM OF ASSESSEE WAS ALLOWED IN THE ASSESSMENT ORDER FRAMED U/S.143(3) OF THE ACT. HE ALSO PLACED ON RECORD THE COPY OF THE SAID ORDER. HE FURTHER SUBMITTED TH AT THE CLAIM OF DEDUCTION IN AY 2006-07 HAS NOT BEEN DISTURBED BY REVENUE EITHER BY REOPENING THE ASSESSMENT U/S.147/148 OF THE ACT OR BY INVOKING RE VISIONARY POWERS U/S. 263 OF THE ACT, MEANING THEREBY THAT CLAIM OF THE DEDUC TION U/S.80IC OF THE ACT AS MADE BY THE ASSESSEE HAS BEEN FOUND TO BE IN ORDER. HE FURTHER SUBMITTED THAT SINCE THERE ARE NO CHANGE IN THE FACTS OF THE CASE BETWEEN AY 2006- 07 AND THE YEAR UNDER CONSIDERATION, THE CLAIM OF ASSESSEE NEEDS TO BE ACCEPTED IN TOTO. HE THUS, SUPPORTED THE ORDER OF THE LD.CIT(A) . 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO DENYING THE CLAIM O F DEDUCTION U/S.80IC OF THE ACT. WE FIND THAT LD.CIT(A) WHILE DECIDING THE ISSU E IN FAVOUR OF ASSESSEE HAS GIVEN A FINDING THAT THERE WAS NO MARKETING DIVISIO N AND, THEREFORE, THERE WAS NO TRANSFER OF GOODS FROM ELIGIBLE TO NON-ELIGIBLE UNDERTAKING AND IN THE ABSENCE OF MARKETING DIVISION BEING A SEPARATE UNDE RTAKING, NO PROFIT COULD BE ATTRIBUTED TO THE MARKETING ACTIVITY. WITH RESPE CT TO BRAND VALUE, THE LD.CIT(A) HAS GIVEN FINDING THAT THE SAME IS OWNED BY THE FOREIGN COLLABORATOR AND THERE CANNOT BE ANY PROFIT ATTRIBU TABLE TO BRAND. HE HAS FURTHER GIVEN A FINDING THAT AO HAD QUANTIFIED THE GROSS PROFIT ATTRIBUTABLE TO ITA NO.2235/AHD/2016 & CO NO.160/AHD/2016 ASTRAL POLYTECHNIK PVT. LTD. ASST.YEAR 2013-14 - 6 - MARKETING AND BRAND VALUE AND DISALLOWANCE AND THAT SINCE DEDUCTION U/S.80IC IS CLAIMED IN RESPECT OF NET PROFIT AND, T HEREFORE, DISALLOWING GROSS PROFIT ATTRIBUTABLE TO MARKETING AND BRAND VALUE IS NOT CORRECT AND THAT FURTHER, SINCE THE MARKETING EXPENSES DEBITED TO TH E PROFIT & LOSS ACCOUNT ARE MORE THAN GROSS PROFIT COMPUTED BY THE AO, THAT THE RE CANNOT BE ANY DISALLOWANCE OF DEDUCTION U/S.80IC OF THE ACT. BEFO RE US, REVENUE HAS NOT PLACED ANY MATERIAL TO CONTROVERT THE FINDINGS OF L D.CIT(A). WE FURTHER FIND THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S.80IC IN AY 2006-07 ALSO AND THE CLAIM HAS BEEN ALLOWED IN THE ASSESSMENT FRAMED U/S .143(3) OF THE ACT, AND THAT NO REOPENING OF ASSESSMENT U/S.147/148 OR U/S. 263 HAS BEEN INITIATED FOR WITHDRAWING THE CLAIM MEANING THEREBY THAT THE CLAI M OF ASSESSEE HAS BEEN ACCEPTED BY REVENUE AND HAS ATTAINED FINALITY. IN V IEW OF THE AFORESAID REASONS, WE FIND NO REASON TO INTERFERE WITH THE OR DER OF THE LD.CIT(A) AND THUS GROUND RAISED BY THE REVENUE IS DISMISSED. AS A RESULT, REVENUES APPEAL FOR AY 2007-08 IS DISMISSED. 7. NOW, WE TAKE UP REVENUES APPEAL IN ITA NO.559/A HD/2012 FOR AY 2008- 09. 7.1. BEFORE US, SINCE BOTH THE PARTIES HAVE ADMITTE D THAT THE FACTS IN THE CASE OF ASSESSMENT YEAR 2008-09 (IN REVENUES APPEAL) AR E IDENTICAL TO THE FACT OF AY 2007-08, WE THEREFORE FOR THE REASONS GIVEN HERE INABOVE WHILE DISPOSING OF REVENUES APPEAL IN ITA NO.3216/AHD/2011 FOR AY 2007-08 AND FOR SIMILAR REASONS, DISMISS THE GROUND OF REVENUE FOR ASSESSME NT YEAR 2008-09 ALSO. WE HAVE ALSO CAREFULLY CONSIDERED THE JUDGMENT PASS ED BY THE HONBLE JURISDICTIONAL HIGH COURT ON THE APPEAL PREFERRED B Y THE REVENUE CHALLENGING THE ORDER PASSED BY THE LEARNED TRIBUNAL IN ASSESSE ES CASE FOR A.Y. 2007-08 AND 2008-09 WHILE DISMISSING THE TAX APPEAL PREFERR ED BY THE REVENUE. THE HONBLE HIGH COURT OBSERVED AS FOLLOWS: 1. REVENUE IS IN APPEAL AGAINST THE JUDGEMENT OF THE INCOME TAX APPELLATE TRIBUNAL RAISING FOLLOWING QUESTION FOR O UR CONSIDERATION: 'WHETHER THE APPELLATE TRIBUNAL WAS RIGHT IN LAW AN D FACTS IN DELETING THE ADDITION IN RESPECT OF DEDUCTION U/S. 80IC OF RS.4,04,59,475/- FOR A.Y. 2007-08 AND RS. 6,87,73,3 62/- FOR A.Y. 2008-09 MADE BY THE ASSESSING OFFICER ? ' 2. THE ISSUE PERTAINS TO THE ASSESSEE'S CLAIM OF D EDUCTION UNDER SECTION 80IC OF THE ACT TO ITS UNIT SITUATED AT BADDI, HIMA CHAL PRADESH, WHICH ITA NO.2235/AHD/2016 & CO NO.160/AHD/2016 ASTRAL POLYTECHNIK PVT. LTD. ASST.YEAR 2013-14 - 7 - UNIT WAS ELIGIBLE FOR SUCH DEDUCTION. THE REVENUE, HOWEVER, HAVE DISPUTE ABOUT THE ENTIRE CLAIM BEING GRANTED ON THE GROUND THAT THE PROFIT EXPENDITURE RELATABLE TO THE MARKETING DIVIS ION AND THE BRAND VALUE OWNED BY FOREIGN COLLABORATION SHOULD HAVE BE EN DISALLOWED. THE CIT (APPEALS) AS WELL AS THE TRIBUNAL BOTH CAME TO A CONCURRENT CONCLUSION THAT THERE WAS NO SEPARATE MARKETING DIV ISION AND THEREFORE, THERE WAS NO TRANSFER OF GOODS FROM ELIG IBLE TO NON-ELIGIBLE UNDERTAKING. THUS, IN ABSENCE OF ANY SEPARATE MARKE TING DIVISION, THERE COULD NOT BE SEPARATION OF PROFIT AND EXPENDI TURE. IT WAS ALSO FOUND THAT THE BRAND WAS OWNED BY THE FOREIGN COLLA BORATION AND THERE CANNOT BE ANY PROFIT ATTRIBUTABLE TO SUCH BRAND. 3. MORE IMPORTANTLY, THE TRIBUNAL NOTED THAT IN TH E PRECEDING ASSESSMENT YEAR 2006-07, THE ASSESSEE HAD SET UP SUCH A CLAIM. THE ASSESSING OFFICER HAD FRAMED SCRUTINY ASSESSMENT DURING WHICH NO DISALLOWANCE WAS MADE. NO ATTEMPT WAS MADE ON PART OF THE REVENU E EITHER TO TAKE SUCH ORDER IN REVISION NOR PROCESS OF REOPENING OF EXEMPTION WAS RESORTED TO. 4. IN SUCH CIRCUMSTANCES, WE SEE NO REASON TO INTE RFERE. NO QUESTION OF LAW ARISES. TAX APPEAL IS DISMISSED. RESPECTFULLY RELYING UPON THE SAME, WE FIND NO INFI RMITY IN THE ORDER IMPUGNED PASSED BY THE FIRST APPELLATE AUTHORITY SO FAR AS TO WARRANT INTERFERENCE. THE QUESTION IS ACCORDINGLY ANSWERED IN THE AFFIRMATIVE, I.E. IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. CON SEQUENTLY, THE APPEALS FAILED AND ACCORDINGLY DISMISSED. 6. GROUND NO.2: REVENUE HAS CHALLENGED THE ORDER PASSED BY THE LEA RNED CIT(A) IN DELETING THE ADDITION OF RS.1,15,41,900/- MADE ON ACCOUNT OF REJECTING THE ACCOUNTING POLICY FOR ALLOCATION OF I NTEREST EXPENSES. 7. THE ASSESSEE HAS DEBITED INTEREST EXPENSES OF RS .590.17 LACS. IT WAS FURTHER SEEN FROM THE PROFIT AND LOSS ACCOUNT OF NO N-TAXABLE UNIT OF BADDI UNIT (NON TAXABLE UNIT) THAT THE ASSESSEE HAS NOT DEBITE D INTEREST EXPENSES. IT HAS ITA NO.2235/AHD/2016 & CO NO.160/AHD/2016 ASTRAL POLYTECHNIK PVT. LTD. ASST.YEAR 2013-14 - 8 - ONLY CLAIMED IN RESPECT OF AHMEDABAD UNIT. ACCORDIN G TO THE LEARNED AO, IT IS NOTHING BUT A DIVERSION OF INCOME BY WAY OF WRON G ALLOCATION OF INTEREST EXPENSES BETWEEN THE ASSESSEES MANUFACTURING UNIT AT BADDI, WHICH IS EXEMPTED U/S 80IC OF THE ACT AND ANOTHER UNIT AT AH MEDABAD BEING NON- EXEMPTED UNIT. IT WAS FURTHER OBSERVED BY THE LEARN ED AO THAT THE RAW MATERIALS ARE MAINLY IMPORTED FROM US AND ARE SENT TO BOTH THE UNITS AS PER THE REQUIREMENT OF THE UNITS. THE ASSESSEE IS A PUBLIC LIMITED COMPANY WHICH HAS SHOWN HUGE PROFIT AT HIMACHAL PRADESH UNIT AS AGAIN ST THE PROFIT OF GUJARAT UNIT. A SHOW-CAUSE WAS ISSUED ON 26.02.2016 TO EXPL AIN AS TO WHY THE INTEREST EXPENSES SHOULD NOT BE PROPORTIONALITY ALLOCATED BE TWEEN BOTH THE UNITS TO SHOW THE TRUE AND CORRECT ALLOCATION OF EXPENSES BE TWEEN TWO UNITS. HOWEVER, THE CONTENTION MADE BY THE ASSESSEE IN REPLY WAS NO T FOUND ACCEPTABLE. THE LEARNED AO ULTIMATELY TREATED RS.3,84,73,000/- BEIN G THE INTEREST EXPENSES AS PROFIT OF BADDI UNIT AND DISALLOWED 30% OF IT U/S 8 0IC OF THE ACT TO THE TUNE OF RS.1,15,41,900/-. IN APPEAL, THE LEARNED CIT(A) REL YING UPON THE ORDER PASSED BY HIS PREDECESSOR FOR A.Y. 2012-13 DECIDED THE ISS UE IN FAVOUR OF THE ASSESSEE BY DELETING ADDITION MADE BY THE LEARNED AO. HENCE, THE INSTANT APPEAL BEFORE US. 8. AT THE TIME OF HEARING OF THE INSTANT APPEAL, TH E LEARNED ADVOCATE APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ISSUE WAS ALREADY DECIDED IN FAVOUR OF THE ASSESSEE BY THE HONBLE CO -ORDINATE BENCH IN REVENUES APPEAL. IN THAT VIEW OF THE MATTER, THE A PPEAL IS LIABLE TO BE DISMISSED. HOWEVER, LEARNED DR FAILED TO CONTROVERT THE CONTENTION MADE BY THE LEARNED AR. ITA NO.2235/AHD/2016 & CO NO.160/AHD/2016 ASTRAL POLYTECHNIK PVT. LTD. ASST.YEAR 2013-14 - 9 - 9. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEVA NT MATERIALS AVAILABLE ON RECORD. WE FIND THAT WHILE PASSING THE ORDER IN DEL ETING THE DISALLOWANCE MADE BY THE LEARNED AO OBSERVED AS FOLLOWS: 5.3 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT OR DER AND THE SUBMISSION FILED BY THE APPELLANT. FURTHER, ONGOING THROUGH TH E ASSESSMENT RECORDS, I FIND THAT SIMILAR ISSUE HAD COME UP FOR ADJUDICATIO N IN THE CASE OF APPELLANT IN ASSESSMENT YEAR 2012-13 AND UNDERSIGNED HAS DECI DED THE ISSUE IN FAVOUR OF THE APPELLANT. THE RELEVANT PORTION OF THE APPEL LATE ORDER FOR THE A. Y. 2012-13 READS AS UNDER: '5.3 IDENTICAL ISSUE CAME UP FOR CONSIDERATION IN T HE PRECEDING A. Y. 2008-09 IN THE APPELLANT'S OWN CASE. VIDE MY ORDER OF EVEN DATE IN APPEAL NO. CIT(A)-VI/DC. CIR. 1/239/11-12, IT WAS H ELD AS UNDER: '4.4 THE CONTENTIONS OF THE ID. A.R. ARE TENABLE. T HE ALLOCATION OF INTEREST EXPENDITURE BETWEEN THE H.P. UNIT AND G UJARAT UNIT WAS BEING DONE CONSISTENTLY ON DAILY PRODUCT BASIS. IN THE IMMEDIATELY PRECEDING YEAR, INTEREST EXPENDITURE OF RS. 22.83 LAKHS WAS ALLOCATED TO THE H.P. UNIT. IN THE YEAR U NDER CONSIDERATION SINCE NO BORROWED FUNDS WERE UTILIZED BY THE H.P. UNIT, INTEREST EXPENDITURE WAS NOT ALLOCATED T O IT. THE CONTENTION THAT THE H.P. UNIT WAS GENERATING ENOUGH PROFITS/CASH SURPLUS AND WAS IN A POSITION TO ADVAN CE SURPLUS MONEY TO THE HEAD OF ICE (INSTEAD OF UTILIZING THE FUNDS BORROWED BY THE HEAD OFFICE) WAS NOT CONTROVERTED B Y THE A.O. AS REGARDS THE FOREIGN EXCHANGE GAIN/LOSS, IN THE R EASONS RECORDED FOR RE-OPENING, THIS ISSUE WAS FIGURING TH EREIN. HOWEVER, IN THE YEAR UNDER CONSIDERATION, A.O. DID NOT ALLOCATE THE FOREIGN EXCHANGE GAIN TO H.P. UNIT, WH EREAS IN THE SUBSEQUENT A.Y. 2009-10 THE FOREIGN EXCHANGE LOSS W AS ALLOCATED BETWEEN THE TWO UNITS. IN THE PRECEDING A . Y. 2007-08 THE INTEREST EXPENDITURE ALLOCATED BY THE APPELLANT TO THE H.P. UNIT OF RS. 22.83 LAKHS WAS NOT DISTURBED BY THE A. O. THUS, THE AO'S APPROACH IN ALLOCATING INTEREST EXPENDITURE AN D FOREIGN EXCHANGE GAIN/LOSS BETWEEN THE TWO UNITS HAS BEEN INCONSISTENT. IT IS VARYING MERELY ON THE BASIS OF THE ASSESSABILITY OF HIGHER OR LOWER INCOME. TAKING INT O ACCOUNT THE TOTALITY OF THE FACTS, I DO NOT FIND ANY REASON TO DISTURB THE ALLOCATION AS BEING DONE BY THE APPELLANT CONSISTEN TLY OVER THE YEARS. I AM THE VIEW THAT IMPUGNED DISALLOWANCE IS NOT SUSTAINABLE. IT IS DELETED. ACCORDINGLY, GROUND NO. 3,4& 5 ARE ALLOWED. GROUND NO. 6 IS AN ALTERNATE CLAIM AND HAS BECOME ITA NO.2235/AHD/2016 & CO NO.160/AHD/2016 ASTRAL POLYTECHNIK PVT. LTD. ASST.YEAR 2013-14 - 10 - INFRUCTUOUS IN VIEW OF MY FINDING ABOVE. ACCORDINGL Y, IT DISMISSED.' IN THE PRECEDING A.Y. 2008-09, A.O. ALLOCATED INTER EST EXPENDITURE BETWEEN THE TWO UNITS BUT DID NOT ALLOCATE THE FORE IGN EXCHANGE GAIN BETWEEN THE TWO UNITS. WHEREAS IN THE YEAR UNDER CONSIDERATION HE HAS ALLO CATED INTEREST EXPENDITURES AND THE FOREIGN EXCHANGE LOSSES BETWEE N THE TWO UNITS. AS SEEN FROM THE CHART FURNISHED BY THE APPELLANT ( REPRODUCED AT PAGE-40 OF THIS ORDER), THE FOREIGN EXCHANGE LOSS W AS RS. 31.24 LAKHS IN A.Y. 2006-07, FOREIGN EXCHANGE GAIN WAS RS. 87.0 9 LAKHS IN A. Y. 2007-08, FOREIGN EXCHANGE GAIN WAS RS. 115.63 LAKHS FOR A.Y. 2008- 09, FOREIGN EXCHANGE LOSS WAS RS. 733.67 LAKHS IN A .Y. 2009-10, FOREIGN EXCHANGE GAIN WAS RS. 300.54 LAKHS IN A.Y. 2010-11 AND FOREIGN EXCHANGE GAIN WAS RS. 24.47 LAKHS IN A.Y. 2 011-12. IRRESPECTIVE THE FOREIGN EXCHANGE GAIN OR LOSS, APP ELLANT HAS BEEN ALLOCATING THE ENTIRE GAIN OR LOSS ONLY TO THE GUJA RAT UNIT, WHICH IS NOT ELIGIBLE FOR DEDUCTION U/S. 80IC. ALL OTHER FACTS REMAINING THE SAME IN THE YEAR UNDE R CONSIDERATION, FOLLOWING MY ORDER FOR A.Y. 2008-09,1 AM OF THE VIE W THAT THE ALLOCATION OF INTEREST EXPENDITURE AND FOREIGN EXCH ANGE LOSS WAS NOT WARRANTED. ACCORDINGLY, IMPUGNED DISALLOWANCE IS DE LETED. THESE GROUNDS OF APPEAL ARE ALLOWED.' FACTS REMAINING THE SAME IN THE YEAR UNDER CONSIDER ATION, FOLLOWING THE ABOVE MENTIONED ORDER, IMPUGNED ADDITION IS DEL ETED. THIS GROUND OF APPEAL IS ALLOWED.' IN VIEW OF THE ABOVE DISCUSSION, AS FACTS OF YEAR U NDER CONSIDERATION ARE IDENTICAL TO FACTS OF EARLIER ASSESSMENT YEARS, FOLLOWING THE ORDER OF MY PREDECESSOR CIT(APPEALS), DISALLOWANCE OF RS. 96,81,300/- MADE BY ASSESSING OFFICER IS DELETED. THESE GROUNDS OF APPEAL ARE ALLOWED.' 5.4 AS THE FACTS OF THE CASE IN THE PRESENT APPEAL FOR THE A. Y. 2013-14 ARE IDENTICAL TO THOSE FOR A.Y. 2012-13, FOLLOWING THE DECISION REFERRED SUPRA, THE IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER FOR RS. 1,15,41,9007- BEING INTEREST EXPENSES ALLOCATED TO APPELLANT'S ELIGIBLE UNIT IN BADE// IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. ITA NO.2235/AHD/2016 & CO NO.160/AHD/2016 ASTRAL POLYTECHNIK PVT. LTD. ASST.YEAR 2013-14 - 11 - WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LEA RNED CIT(A) SINCE THE SAME VIEW HAS CONSISTENTLY BEEN FOLLOWED BY THE LEARNED CIT(A) WHICH WAS UPHELD BY THE LEARNED ITAT. IN THAT VIEW OF THE MATTER, WE FIND REVENUES APPEAL TO BE DEVOID ON MERIT AND HENCE DISMISSED. 10. GROUND NO.3: THIS GROUND RELATES TO DELETION OF ADDITION OF RS.3,64,326/- MADE ON ACCOUNT OF DISALLOWANCE U/S 1 4A R.W.R. 8D OF THE ACT. (OUT OF TOTAL DISALLOWANCE OF RS.3,64,326/-, RS.2,6 8,476/- PERTAINS TO INTEREST DISALLOWANCE AND RS.95,850/- PERTAINS TO ADMINISTRA TIVE DISALLOWANCE.) 11. THE APPELLANT-COMPANY INVESTED IN THE UNQUOTED EQUITY SHARES OF ASTRAL TECHNOLOGIES LTD. KENYA AND THE SAME IS TAXA BLE. IT HAS ALSO INVESTED IN MUTUAL FUNDS OUT OF HIS OWN INTEREST FREE FUNDS TO EARN SHORT TERM BENEFIT FOR SUCH INVESTMENT AND NOT UTILIZED BORROWED CAPITAL A MOUNT AS THE CASE MADE OUT BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW. IT WA S FURTHER CONTENDED BY THE ASSESSEE THAT IT HAS NOT EARNED ANY EXEMPT INCOME, WHICH IS EVIDENT FROM THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. SINCE NO EXEMPT INCOME HAS BEEN EARNED DURING THE YEAR UNDER CONSIDERATION AND THE PROVISION OF SECTION 14A DOES NOT APPLY. RELIANCE WAS ALSO PLACED ON THE JUDGMENT PASSED BY THE APEX COURT IN THE CASE OF CIT-VS-CHETTINAD LOGISTIC S (P) LTD. [2018] 95 TAXMANN.COM 250 (SC). SO FAR AS THE ALLOCATION MADE BY THE LEARNED AO THAT NO ADMINISTRATIVE EXPENSES HAS BEEN DISALLOWED IN R ESPECT OF MANAGEMENT OF INVESTMENT IN MUTUAL FUNDS, IT WAS SUBMITTED THAT T HE INVESTMENT IN MUTUAL FUND HAS BEEN MADE ON OWN INTEREST FREE FUNDS. NEIT HER ANY NEW INVESTMENT HAS BEEN MADE DURING THE YEAR UNDER CONSIDERATION I N UNQUOTED EQUITY SHARES OF HIS SUBSIDIARY COMPANIES NAMELY ASTRAL BIOCHEM P VT. LTD. AND ADVANCE ADHESIVES LTD. HOWEVER, WITHOUT CONSIDERING THE CON TENTION AND/OR ITA NO.2235/AHD/2016 & CO NO.160/AHD/2016 ASTRAL POLYTECHNIK PVT. LTD. ASST.YEAR 2013-14 - 12 - EXPLANATION RENDERED BY THE APPELLANT COMPANY, THE LEARNED AO APPLIED THE SECTION 14A R.W.R. 8D(2)(II) OF THE ACT AND DISALLO WED RS.3,64,326/-. THE LEARNED CIT(A), IN APPEAL DELETED SUCH ADDITION MAD E BY THE LEARNED AO. HENCE THE INSTANT APPEAL BEFORE US. 12. AT THE TIME OF HEARING OF THE INSTANT APPEAL, T HE LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT SINCE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME FOR INVESTMENT MADE BY IT WHICH IS ALSO APPARENT FROM THE AUDITED ACCOUNT RELYING UPON THE JUDGMENT PASSED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT-VS-COR RTECH ENERGY PVT. LTD. REPORTED IN 223 TAXMAN 130, THE LEARNED CIT(A) RIGH TLY DELETED THE ADDITION MADE BY THE LEARNED AO. ON THE CONTRARY, THE LEARNE D DR RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER. 13. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEV ANT MATERIALS AVAILABLE ON RECORD. IT APPEARS THAT THE ASSESSEE HAS REALLY NOT EARNED ANY EXEMPT INCOME WHICH IS EVIDENT FROM RECORDS AVAILABLE BEFORE US. THE ASSESSEE HAS NOT CLAIMED ANY EXEMPTION. IT IS A FACT THAT NO DEDUCTI ON SHALL BE ALLOWED IN RESPECT OF EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE AC T. IN THAT VIEW OF THE MATTER FOLLOWING THE RATIO LAID DOWN BY THE HONBLE JURISD ICTIONAL HIGH COURT IN THE CASE OF CORRTECH ENERGY LTD. (SUPRA), THE LEARNED C IT(A) WHILE DELETING ADDITION OBSERVED AS FOLLOWS: 6.3 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORD ER AND THE SUBMISSION FILED BY THE APPELLANT. I OBSERVE THAT DURING THE Y EAR UNDER CONSIDERATION, APPELLANT HAS NOT EARNED ANY EXEMPT INCOME FROM INV ESTMENTS MADE BY IT WHICH IS APPARENT FROM AUDITED ANNUAL ACCOUNTS AS W ELL AS COMPUTATION OF TOTAL INCOME AS SUBMITTED BEFORE ASSESSING OFFICER AS WELL AS IN APPELLATE PROCEEDINGS. THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT V/S CORRTECH ENERGY PVT. LIMITED 223 TAXMAN 130 ON IDENTICAL ISSUE OF ITA NO.2235/AHD/2016 & CO NO.160/AHD/2016 ASTRAL POLYTECHNIK PVT. LTD. ASST.YEAR 2013-14 - 13 - DISALLOWANCE UNDER SECTION 14A WHEN NO DIVIDEND INC OME IS EARNED BY ASSESSEE HAS HELD AS UNDER: '4. COUNSEL FOR THE REVENUE SUBMITTED THAT THE ASSE SSING OFFICER AS WELL AS CIT(APPEALS) HAD APPLIED FORMULA OF RULE 8D OF THE INCOME TAX RULES, SINCE THIS CASE AROSE AFTER THE ASSESSME NT YEAR 2009-2010. SINCE IN THE PRESENT CASE, WE ARE CONCERNED WITH TH E ASSESSMENT YEAR 2009-2010, SUCH FORMULA WAS CORRECTLY APPLIED BY TH E REVENUE. WE HOWEVER, NOTICE THAT SUB-SECTION(L) OF SECTION 14A PROVIDES THAT FOR THE PURPOSE OF COMPUTING TOTAL INCOME UNDER CHAPTER IV OF THE ACT, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF EXPENDITUR E INCURRED BY THE ASSESSES IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. IN THE PRESENT CASE, THE TRIB UNAL HAS RECORDED THE FINDING OF FACT THAT THE ASSESSEE DID NOT MAKE ANY CLAIM FOR EXEMPTION OF ANY INCOME FROM PAYMENT OF TAX. IT WAS ON THIS BASIS THAT THE TRIBUNAL HELD THAT DISALLOWANCE UNDER SECTION 1 4A OF THE ACT COULD NOT BE MADE. IN THE PROCESS TRIBUNAL RELIED ON THE DECISION OF DIVISION BENCH OF PUNJAB AND HARYANA HIGH COURT IN CASE OF C IT V WINSOME TEXTILE INDUSTRIES LTD. [2009] 319 ITR 204 IN WHICH ALSO THE COURT HAD OBSERVED AS UNDER: '7. WE DO NOT FIND ANY MERIT IN THIS SUBMISSION. TH E JUDGEMENT OF THIS COURT IN ABHISHEK INDUSTRIES LTD (2006) 286 ITR 1 WAS ON THE ISSUE OF ALLOWABILITY OF INTEREST PAID ON LOANS GIV EN TO SISTER CONCERNS, WITHOUT INTEREST. IT WAS HELD THAT DEDUCTION FOR IN TEREST WAS PERMISSIBLE WHEN LOAN WAS TAKEN FOR BUSINESS PURPOS E AND NOT FOR DIVERTING THE SAME TO SISTER CONCERN WITHOUT HAVING NEXUS WITH THE BUSINESS. THE OBSERVATIONS MADE THEREIN HAVE TO BE READ IN THAT CONTEXT. IN THE PRESENT CASE, ADMITTEDLY THE ASSESS EE DID NOT MAKE ANY CLAIM FOR EXEMPTION. IN SUCH A SITUATION SECTION 14 A COULD HAVE NO APPLICATION.' 5. WE DO NOT FIND ANY QUESTION OF LAW ARISING, TAX APPEAL IS THEREFORE DISMISSED.' IT IS OBSERVED THAT CASE OF APPELLANT IS SQUARELY C OVERED BY DECISION OF HON'BLE GUJARAT HIGH COURT REFERRED SUPRA HENCE REL YING UPON SAID DECISION, DISALLOWANCE UNDER SECTION 14A MADE BY ASSESSING OF FICER FOR RS.3,64,326/- IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. HAVING REGARD TO THE RATIO LAID DOWN BY THE JURISDI CTIONAL HIGH COURT IN THE CASE OF CORRTECH ENERGY LTD., WE FIND NO INFIRM ITY IN THE ORDER PASSED BY ITA NO.2235/AHD/2016 & CO NO.160/AHD/2016 ASTRAL POLYTECHNIK PVT. LTD. ASST.YEAR 2013-14 - 14 - THE LEARNED CIT(A) SO FAR AS TO WARRANT INTERFERENC E. THE QUESTION IS ACCORDINGLY ANSWERED IN THE AFFIRMATIVE, I.E. IN FA VOUR OF THE ASSESSEE AND AGAINST THE REVENUE. CONSEQUENTLY, THE APPEAL FAILS AND IS ACCORDINGLY DISMISSED. CROSS OBJECTION NO.160/AHD/2016 : 14. THE CROSS OBJECTION HAS BEEN FILED BY THE ASSES SEE AGAINST THE CONFIRMATION OF DISALLOWANCE OF EMPLOYEES CONTRIBUT ION TO PF AND ESI FOR RS.57,850/- MADE BY THE ASSESSING OFFICER ON THE PR EMISE THAT SAID AMOUNT THOUGH HAS BEEN PAID BY THE ASSESSEE BEFORE THE DUE DATE OF FILING OF RETURN BUT NOT WITHIN THE DUE DATE PRESCRIBED IN THE CONCERNED ACT. 15. IT APPEARS FROM THE RECORD THAT THE EMPLOYEES C ONTRIBUTION AMOUNTING TO RS.57,097/- AND RS.752/- TO PF AND ESI RESPECTIVELY NOT PAID WITHIN DUE DATES PRESCRIBED IN PF ACT AND THEREFORE THE SAME IS NOT ALLOWABLE FOR DEDUCTION U/S 36(1)(VA) OF THE ACT. THE ISSUE HAS ALREADY BEEN SE TTLED BY THE HONBLE HIGH COURT IN THE CASE OF CIT-VS-GUJARAT STATE ROAD TRAN SPORT CORPORATION HOLDING THAT THE EMPLOYEES CONTRIBUTION TO PF AND ESI IS NO T COVERED BY SECTION 43B AND IS ONLY ALLOWABLE AS A DEDUCTION U/S 36(1)(VA) IF PAID BY THE DUE DATE PRESCRIBED THEREIN. HENCE, RELYING UPON THE RATIO L AID DOWN BY THE SAID JUDGMENT THE LEARNED AO DISALLOWED THE AMOUNT OF RS .57,849/- OF WHICH RS.57,097/- WAS THE EMPLOYEES CONTRIBUTION TOWARDS PF AND RS.752/- TOWARDS ESI AND ULTIMATELY THE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 16. THE LEARNED CIT(A) FOLLOWING THE JUDGMENT PASSE D BY THE HONBLE JURISDICTIONAL HIGH COURT WHILE CONFIRMING THE ADDI TION MADE BY THE LEARNED AO OBSERVED AS FOLLOWS: ITA NO.2235/AHD/2016 & CO NO.160/AHD/2016 ASTRAL POLYTECHNIK PVT. LTD. ASST.YEAR 2013-14 - 15 - 7.2 DURING THE COURSE OF APPELLATE HEARING, APPELLANT H AS NOT FILED ANY WRITTEN SUBMISSION BUT ARGUED THAT AS ABOVE CONTRIB UTION IS PAID BEFORE DUE DATE OF FILING OF RETURN OF INCOME, NO DISALLOWANCE SHOULD BE MADE. 7.3 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORD ER AND ARGUMENTS MADE BY APPELLANT. THE ASSESSING OFFICER HAS OBSERV ED THAT APPELLANT HAS FAILED TO DEPOSIT EMPLOYEES CONTRIBUTION TO PROVIDE NT FUND AND ESIC BEFORE DUE DATE PRESCRIBED UNDER RELEVANT PROVISIONS OF TH E SAID ACTS HENCE HE RELIED UPON PROVISIONS OF SECTION 36(1)(VA) R.W.S 2(24) (X ) AND DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF STATE ROAD TRANSP ORT CORPORATION AND MADE DISALLOWANCE OF RS 57849/-. ON THE OTHER HAND, APPELLANT HAS ARGUED THAT AS EMPLOYEES' CONTRIBUTION TO PROVIDENT FUND A ND ESIC ARE MADE BEFORE DUE DATE OF FILING OF RETURN OF INCOME DISALLOWANCE CANNOT BE MADE. 7.4 ON CAREFUL CONSIDERATION OF OBSERVATION OF ASSESSIN G OFFICER AND CONTENTION OF APPELLANT, I OBSERVE THAT ENTIRE ISSU E IS COVERED AGAINST APPELLANT BY DECISION OF HON'BLE GUJARAT HIGH COURT IN CASE OF STATE ROAD TRANSPORT CORPORATION (366 ITR 170) WHEREIN IT IS H ELD AS UNDER : 'SECTION 43B, READ WITH SECTION 36(1)(VA) OF THE IN COME-TAX ACT, 1961 -BUSINESS DISALLOWANCE - CERTAIN DEDUCTIONS TO BE A LLOWED ON ACTUAL PAYMENT (EMPLOYEES CONTRIBUTION) - WHETHER WHERE AN EMPLOYER HAS NOT CREDITED SUM RECEIVED BY IT AS EMPLOYEES' CONTR IBUTION TO EMPLOYEES' ACCOUNT IN RELEVANT FUND ON OR BEFORE DU E DATE AS PRESCRIBED IN EXPLANATION TO SECTION 36(1 )(VA), AS SESSES SHALL NOT BE ENTITLED TO DEDUCTION OF SUCH AMOUNT THOUGH HE DEPO SITS SAME BEFORE DUE DATE PRESCRIBED UNDER SECTION 43B I.E., PRIOR T O FILING OF RETURN UNDER SECTION 139(1) - HELD, YES - ASSESSEE STATE T RANSPORT CORPORATION COLLECTED A SUM BEING PROVIDENT FUND CO NTRIBUTION FROM ITS EMPLOYEES - HOWEVER, IT HAD DEPOSITED LESSER SUM IN PROVIDENT FUND ACCOUNT - ASSESSING OFFICER DISALLOWED SAME UNDER S ECTION 43B - HOWEVER, COMMISSIONER (APPEALS) DELETED DISALLOWANC E ON GROUND THAT EMPLOYEES CONTRIBUTION WAS DEPOSITED BEFORE FI LING RETURN - WHETHER SINCE ASSESSEE HAD NOT DEPOSITED SAID CONTR IBUTION IN RESPECTIVE FUND ACCOUNT ON DATE AS PRESCRIBED IN EX PLANATION TO SECTION 36(1 )(VA), DISALLOWANCE MADE BY ASSESSING OFFICER WAS JUST AND PROPER - HELD, YES [PARA 8] [IN FAVOUR OF REVEN UE] 7.5. CONSIDERING THE ABOVE DECISION OF HON'BLE JURI SDICTIONAL HIGH COURT IN THE CASE OF STATE ROAD TRANSPORT CORPORATION (366 I TR 170) ADDITION MADE BY ASSESSING OFFICER IS UPHELD. THIS GROUND OF APPEAL IS DISMISSED. TAKING INTO CONSIDERATION THE RATIO LAID DOWN BY TH E JURISDICTIONAL HIGH COURT IN THE CASE GUJARAT STATE ROAD TRANSPORT CORP ORATION (SUPRA), WE FIND NO ITA NO.2235/AHD/2016 & CO NO.160/AHD/2016 ASTRAL POLYTECHNIK PVT. LTD. ASST.YEAR 2013-14 - 16 - JUSTIFICATION TO INTERFERE WITH THE ORDER PASSED BY THE LEARNED CIT(A). HENCE, THE SAME IS HEREBY UPHELD. IN THE RESULT, ASSESSEE S CO IS DISMISSED. 17. IN THE COMBINED RESULT, REVENUES APPEAL AND AS SESSEES CO BOTH ARE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 06/05/2019 SD/- SD /- ( WASEEM AHMED ) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 06/05/2019 PRITI YADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)-1, AHMEDABAD. 5. , ! ', #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER , //TRUE COPY// / (DY./ASSTT.REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 01/05/2019 (DICTATION PAGES 12) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 06/05/2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 06.05.2019 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER..