TRICOM INDIIA LTD, MUMBAI V. ACIT CEN CIR -41, MUMBAI

ITA 4316/MUM/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6276 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 15-11-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 16-07-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D SONGATE
• Keywords: Business income; Depreciation
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI V.DURGA RAO, JM ITA NO.4316/MUM/2009 : ASST.YEAR 2006-2007 M/S.TRICOM INDIA LIMITED GANDHI ESTATE, A.K.ROAD SAFED POOL, SAKI NAKA ANDHERI-KURLA ROAD MUMBAI 400 072. PA NO.AAACT2807R. VS. THE ASSTT.COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 41 MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIJAY MEHTA RESPONDENT BY : SHRI D.SONGATE O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 20.05.2009 IN RELATION TO THE ASSESSMENT YEAR 2006-2007. 2. GROUND NOS.1.1, 1.2 AND 1.3 DEAL WITH THE CONFIR MATION OF DISALLOWANCE OF CLAIM U/S.10B IN RESPECT OF INTEREST INCOME OF RS.9 2,12,637, MISCELLANEOUS INCOME OF RS.9,50,160 AND SURPLUS ON SALE OF INVESTMENT OF RS.2,04,019. 3. AT THE VERY OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT HE WAS NOT PRESSING HIS CLAIM OF DEDUCTION U/S.10B IN RESP ECT OF SURPLUS ON SALE OF INVESTMENT. THE IMPUGNED ORDER IS UPHELD TO THIS EX TENT. 4. THE FACTS CONCERNING THE ALLOWABILITY OF DEDUCTI ON U/S.10B ON INTEREST INCOME ARE THAT THE ASSESSEE-COMPANY WAS ENGAGED IN THE BUSINESS OF IT ENABLED SERVICES AND BPO TRANSNSACTION PROCESSING. DEDUCTIO N U/S.10B WAS CLAIMED INTER ALIA ON INTEREST INCOME OF RS.92,12,637. THE ASSESSING OFFICER NOTED THAT SECTION 10B(4) R.W.S. 10B(1) PROVIDES FOR DEDUCTION IN RESP ECT OF PROFITS DERIVED FROM ITA NO.4316/MUM/2009 M/S.TRICOM INDIA LIMITED. 2 EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE ON THE AMOUNT WHICH BEARS TO THE PROFITS OF THE BUSINESS OF THE UNDERTAKING THE SAME PROPORTION AS THE EXPORT TURNOVER IN RESPECT OF COMPUTER SOFTWARE BEARS TO T HE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE UNDERTAKING. IT WAS OPINED THAT T HE INTEREST INCOME WAS INCOME FROM OTHER SOURCES. ON BEING SHOW CAUSED AS TO WHY THIS AMOUNT BE NOT REDUCED FROM THE AMOUNT ELIGIBLE FOR DEDUCTION U/S.10B, THE ASSESSEE STATED THAT IT HAS SEVERAL UNITS SITUATED AT DIFFERENT LOCATIONS IN SO FTWARE TECHNOLOGY PARK SATISFYING THE CONDITIONS OF SECTION 10B. IT WAS FURTHER EXPLA INED THAT EACH UNIT GENERATED SUFFICIENT SURPLUS WHICH WAS DEPLOYED FOR THE PURPO SE OF THE BUSINESS AND TEMPORARY SURPLUSES WERE DEPLOYED IN SHORT TERM DEP OSITS WITH BANKS OR MONEY MARKET INSTRUMENTS. IT WAS, THEREFORE, CONTENDED TH AT THE DEDUCTION BE ALLOWED ON THIS AMOUNT. IT WAS ALSO CLAIMED THAT THE SCHEME FO R DEDUCTION U/S.10B WAS SIMILAR TO THAT OF SECTION 80HHC AND HENCE THE INTEREST INC OME SHOULD BE TREATED AS BUSINESS INCOME ELIGIBLE FOR DEDUCTION U/S.10B. THE ASSESSING OFFICER, RELYING ON THE CASE OF CHENNAI BENCH OF THE TRIBUNAL IN TECHEU NGLEE STATIONARY VS. ITO 5 SOT 428, HELD THAT THE INTEREST RECEIVED WAS NOT E LIGIBLE FOR DEDUCTION U/S.10B. DRAWING STRENGTH FROM THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. STERLING FOODS [237 ITR 579 (SC)], THE ASSESSING OFFICER CAME TO HOLD THAT THE DEDUCTION COULD NOT BE ALLOWED ON THE AMOU NT OF INTEREST INCOME. THE LEARNED CIT(A) NOTED THAT SIMILAR ISSUE WAS DEALT W ITH BY HIS PREDECESSOR IN ASSESSMENT YEAR 2005-2006 AND THE VIEW OF THE A.O. WAS UPHELD. FOLLOWING THE SAME, HE REFUSED TO ACCEPT THE ASSESSEES CONTENTIO N. 5. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD WE FIND THAT THE CASE OF THE ASSESSEE FOR AS SESSMENT YEAR 2005-2006 CAME UP FOR ADJUDICATION BEFORE THE TRIBUNAL IN TRICOM INDIA LTD. VS. ACIT [36 SOT 302 (MUM.)]. IN THIS CASE IT HAS BEEN HELD THAT THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.10B IN RESPECT OF INTEREST INCOME. IN THE SAID EARLIER YEAR ALSO THE ASSESSEE ITA NO.4316/MUM/2009 M/S.TRICOM INDIA LIMITED. 3 RAISED THE SAME PLEA AS IN THE CURRENT YEAR, WHICH IS RECORDED IN PARA 2 : THESE UNITS GENERATED SURPLUS FUNDS WHICH WERE DEPOSITED IN SHORT-TERM DEPOSITS WITH THE BANKS ETC.. AFTER MAKING A DETAILED ANALYSIS AND C ONSIDERING SEVERAL DECISIONS, THE TRIBUNAL HAS HELD IN THIS CASE THAT THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.10B IN RESPECT OF INTEREST INCOME. TO THIS EXTENT, THE LD. AR FAIRLY AGREED THAT IN THE EARLIER YEAR, THE SAME ISSUE HAS BEEN DECIDED BY TH E TRIBUNAL AGAINST THE ASSESSEE. 6. THE ASSESSEE HAS RAISED AN ADDITIONAL GROUND OF APPEAL AS UNDER:- 1. THE LD.CIT(A) HAS ERRED IN NOT HOLDING THAT THE INTEREST EXPENDITURE RELATABLE TO FIXED DEPOSITS AND ICDS AR E TO BE REDUCED FROM THE EXPENDITURE PERTAINING TO ELIGIBLE UNDERTA KING. THE LD.CIT(A) OUGHT TO HAVE DIRECTED TO LD.ASSESS ING OFFICER TO INCREASE THE PROFIT OF THE ELIGIBLE UNDERTAKING U/S.10B OF THE INCOME TAX ACT BY SUCH AMOUNT. 7. PRAYING FOR THE ADMISSION OF ADDITIONAL GROUND, THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT THE INTEREST EXPENDITURE RE LATABLE TO THE FIXED DEPOSITS AND ICDS WAS TO BE REDUCED FROM THE EXPENDITURE PERTAIN ING TO THE ELIGIBLE UNDERTAKING. HE RELIED ON ONE ORDER PASSED BY THE MUMBAI BENCH O F THE TRIBUNAL IN WESTERN REFRIGERATION PVT. LTD. VS. DCIT IN ITA NO.6167/MUM /2009 IN WHICH THE ASSESSEE RAISED SIMILAR GROUND IN THE CONTEXT OF SECTION 80- IB WHICH WAS ADMITTED BY THE TRIBUNAL AND THE MATTER WAS RESTORED TO THE FILE OF A.O. FOR VERIFICATION OF THE NEXUS BETWEEN THE INTEREST EXPENDITURE AND INTEREST RECEI PTS. IN VIEW OF THIS PRECEDENT HE REQUESTED THAT THE ADDITIONAL GROUND BE ADMITTED. N O SERIOUS OBJECTION WAS RAISED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. WE, THE REFORE, ADMIT THE ADDITIONAL GROUND. THE QUESTION WHETHER THE INTEREST BEARING FUNDS WERE INVESTED FOR EARNING INTEREST INCOME IS A QUESTION OF FACT, WHICH VAIRE S FROM CASE TO CASE. IN THE PRESENT ITA NO.4316/MUM/2009 M/S.TRICOM INDIA LIMITED. 4 CASE WE WILL PROCEED TO EXAMINE THE ASSESSEES CONT ENTION IN THIS REGARD ON THE BASIS OF THE FACTS AVAILABLE ON RECORD. 8. THROUGH THE ADDITIONAL GROUND IT HAS BEEN URGED THAT THE INTEREST RECEIVED ON FUNDS ADVANCED DURING THE YEAR OUT OF THE BORROWED FUNDS SHOULD BE DEDUCTED FROM THE INTEREST EXPENDITURE CLAIMED BY THE ASSESSEE WH ICH WOULD RESULT IN INCREASE IN THE INCOME ELIGIBLE FOR DEDUCTION U/S.10B. IN SUPPO RT OF THIS CONTENTION, A CHART HAS BEEN PLACED AT PAGE 17 INDICATING THE AMOUNT OF SUC H INTEREST AT RS.19.83 LAKHS. PAGE 18 OF THE PAPER BOOK IS THE SUPPORTING DOCUMEN T TO PAGE 17 SHOWING INTEREST RECEIVED ON BORROWED FUNDS ADVANCED DURING THE YEAR OUT OF BORROWED FUNDS. THIS PAGE NO.18 HAS THE HEADING DETAILS OF ADVANCE MAD E DURING THE YEAR OUT OF THE CASH CREDIT ACCOUNT WITH STATE BANK OF INDIA, MIDC BRANCH AND BALANCE WITH BANK ON RESPECT DATES. IN THIS CHART THE DEBIT BALANCES IN CASH CREDIT ACCOUNT ON THE DATES OF ICDS GIVEN ARE INDICATED. THE LEARNED A.R. CLAIM ED THAT THE ASSESSEE BORROWED FUNDS WHICH WERE ADVANCED BY WAY OF INTER-CORPORATE DEPOSITS ON WHICH INTEREST RECEIVED SHOULD BE REDUCED FROM THE INTEREST EXPEND ITURE. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS SEEN THAT THE PROFIT BEFORE TAX FOR THE YEAR UNDER CONSIDERATION IS RS.8,99,95,435. FURTHER THE AMOUNT OF DEPRECIATION ALLOWANCE FOR THE YEAR IS RS.1,01,73,374 GIVING TOTAL CASH PROFIT AT RS.10.00 CRORES. APART FROM THAT THE ASSESSEES SHARE CAPITAL IS RS.4.52 CRORES PLUS SUB STANTIAL AMOUNT OF GENERAL RESERVE. AS AGAINST THAT THE AMOUNT OF ICDS GIVEN I S RS.1,55,75,000. THUS IT CAN BE SEEN THAT ON ONE HAND THE ASSESSEE HAS SUBSTANTIAL INTEREST FREE FUNDS AT ITS DISPOSAL IN THE SHAPE OF SHARE CAPITAL AND INCOME FOR THE YE AR AND ON THE OTHER HAND THERE ARE ADVANCES MADE OUT OF CASH CREDIT ACCOUNT WHICH AMOU NT IS FAR LESS THAN THE AMOUNT OF INTEREST FREE FUNDS. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. RELIANCE UTILITIES AND POWER LTD. [(2009) 313 ITR 3 40 (BOM.)] HAS HELD THAT WHERE ITA NO.4316/MUM/2009 M/S.TRICOM INDIA LIMITED. 5 THE ASSESSEE POSSESSES SUFFICIENT INTEREST FREE ADV ANCES OF ITS OWN WHICH WERE GENERATED IN THE COURSE OF THE RELEVANT FINANCIAL Y EAR APART FROM SUBSTANTIAL SHAREHOLDERS FUND, PRESUMPTION STANDS ESTABLISHED T HAT THE INVESTMENTS IN SISTER CONCERNS WERE MADE BY THE ASSESSEE OUT OF INTEREST FREE FUNDS, AND THEREFORE, NO PART OF INTEREST ON BORROWINGS CAN BE DISALLOWED ON THE BASIS THAT THE INVESTMENTS WERE MADE OUT OF INTEREST BEARING FUNDS. THIS JUDGE MENT OF THE HONBLE JURISDICTIONAL HIGH COURT IS THE AUTHORITY FOR THE PROPOSITION THAT WHERE THE INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE ARE MORE THA N THE AMOUNTS ADVANCED, THEN THE PRESUMPTION IS TO BE DRAWN THAT SUCH INVESTMEN T, UNRELATED WITH THE ACTUAL CARRYING ON OF BUSINESS, WAS FINANCED FIRSTLY OUT OF INTEREST FREE FUNDS AVAILABLE AT ASSESSEES DISPOSAL. IN REACHING THIS CONCLUSION TH E HONBLE BOMBAY HIGH COURT RELIED ON THE JUDGEMENT OF THE HONBLE SUPREME COUR T IN EAST INDIA PHARMACEUTICAL WORKS LTD. VS. CIT [(1997) 224 ITR 6 27 (SC)] AND THAT OF HONBLE CALCUTTA HIGH COURT IN WOOLCOMBERS OF INDIA LTD. VS. CIT [(1982) 134 ITR 219 (CAL.)] . IN THE LATER CASE IT HAS BEEN HELD THAT WHERE THE ASSESSEE TOOK MONEY FROM OVERDRAFT ACCOUNT FOR NON-BUSINESS PURPO SES AND THE ASSESSEE HAD ALSO SUFFICIENT PROFITS WHICH WERE DEPOSITED INTO SUCH B ANK ACCOUNT THE PRESUMPTION WOULD BE THAT THE AMOUNTS WERE PAID OUT OF PROFITS OF THE YEAR AND NOT OUT OF OVERDRAFT ACCOUNT FOR RUNNING OF THE BUSINESS. ADVE RTING TO THE FACTS OF THE INSTANT CASE WE FIND THAT THE ADVANCES WERE MADE IN THE SHA PE OF ICDS OUT OF CASH CREDIT ACCOUNT WITH STATE BANK OF INDIA, MIDC BRANCH. THE CASH CREDIT ACCOUNT WITH THE BANK RECORDS THE DEPOSITS AND WITHDRAWALS REGULARLY ON DAY TO DAY BASIS AND THERE IS NO EARMARKING OF A PARTICULAR LOAN AS IS IN THE CASE OF TERM LOANS. WITH EACH TRANSACTION OF DEPOSIT THE CREDIT BALANCE COMES DO WN AND VICE VERSA. WHEN WE EXAMINE THE ADVANCING OF ICDS AMOUNTING TO RS.1.55 CRORES THROUGH THE CASH CREDIT ACCOUNT IN THE BACKDROP OF INTEREST FREE F UNDS AVAILABLE WITH THE ASSESSEE IN THE SHAPE OF PROFIT FOR THE YEAR ALONG WITH SHARE CAPITAL AND GENERAL RESERVE, WHICH IS FAR IN EXCESS, IT BECOMES CRYSTAL CLEAR THAT TH E ADVANCING OF SUCH ICDS HAS TO BE ITA NO.4316/MUM/2009 M/S.TRICOM INDIA LIMITED. 6 PRESUMED AS FINANCED OUT OF INTEREST FREE FUNDS AND NOT THE BORROWED FUNDS. RESPECTFULLY FOLLOWING THE JUDGEMENT IN THE CASE RELIANCE UTILITIES AND POWER LTD. (SUPRA) WE HOLD THAT SUCH ADVANCES WERE MADE OUT OF ASSESS EES OWN FUNDS. THE RATIO OF THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT HAS TO BE APPLIED, IRRESPECTIVE OF THE FACT, WHETHER IT GIVES RELIEF TO THE ASSSESSEE OR THE REVENUE. HEN ON THE BASIS OF THIS JUDGMENT, THE CONTENTION OF T HE ASSESSES IS ACCEPTED AND THE ADDITION IS DELETED, IT CANNOT BE HEARD THAT THIS JUDGMENT BE NOT APPLIED AS THE ASSESSEE IS BENEFITED WITH THE HIGHER AMOUNT OF DED UCTION ON THE BASIS OF HIGHER INCOME. WE, THEREFORE, REJECT THIS CONTENTION OF THE ASSESSEE AS DEVOID OF ANY MERIT. 10. THE LEARNED COUNSEL FOR THE ASSESSEE TRIED TO D ISTINGUISH THE FACTS OF THE INSTANT YEAR VIS--VIS THAT OF THE PRECEDING YEAR B Y ARGUING THAT IN THIS YEAR THE ASSESSEE BORROWED MONEY FROM CASH CREDIT ACCOUNT WH ICH WAS NOT THE CASE IN THE EARLIER YEAR DECIDED BY THE TRIBUNAL. WE ARE NOT CO NVINCED WITH THIS SUBMISSION FOR THE REASON THAT THE ASSESSEE WAS ENJOYING CASH CRED IT FACILITY IN THE EARLIER YEAR AS WELL. FURTHER SAME REASONS WERE ADVANCED IN THE CUR RENT YEAR AS WERE TENDERED IN EARLIER YEAR THAT EACH UNIT GENERATED SUFFICIENT SU RPLUS WHICH WERE DEPLOYED FOR THE PURPOSE OF BUSINESS AND TEMPORARY SURPLUS DEPLOYED IN SHORT TERM DEPOSITS WITH BANK OR MONEY MARKET INSTRUMENTS. THAT BEING THE PO SITION, WE FIND THAT THE FACTS OF THE INSTANT YEAR ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF THE PRECEDING YEAR, WHICH HAS BEEN DECIDED BY THE TRIBUNAL. RESPECTFULL Y FOLLOWING THE PRECEDENT, WE HOLD THAT THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.10B IN RESPECT OF INTEREST INCOME OF RS.92,12,637. 11. THE OTHER SEGMENT OF THIS GROUND IS ABOUT THE DENIAL OF DEDUCTION U/S.10B IN RESPECT OF MISCELLANEOUS INCOME OF RS.9,50,160. THE LEARNED COUNSEL CANDIDLY ACCEPTED THAT IN THE PRECEDING YEAR ALSO DENIAL OF DEDUCTION ON MISCELLANEOUS ITA NO.4316/MUM/2009 M/S.TRICOM INDIA LIMITED. 7 INCOME WAS THERE AND THE TRIBUNAL HAS ACCEPTED THE A.O.S STAND. HE HOWEVER CONTENDED THAT THERE IS NO DISCUSSION IN THE TRIBUN AL ORDER ABOUT THE DETAIL OF MISCELLANEOUS INCOME. INVITING OUR ATTENTION TOWARD S PAGE 19 OF THE PAPER BOOK, THE LEARNED A.R. CONTENDED THAT THE MISCELLANEOUS I NCOME OF RS.9,50,160 CONSISTED OF THE FOLLOWING ITEMS:- SALARY CHEQUES OUTSTANDING FOR MORE THAN 6 MONTHS REVERSED RS.2,11,721 MISCELLANEOUS INCOME RS. 1,874 INTEREST ON I.TAX REFUND (A.Y.2001-02) RS. 7,5 77 PRIOR YEAR INCOME : PROVISION FOR LEAVE ENCASHMENT PAYABLE REVERSED RS.3,73,689 SCRAP SALES RS. 32,805 INTEREST ON ALLOTMENT OF SHARES RS.3,22,494 ---------------- RS.9,50,160 ========= IT WAS, THEREFORE, CONTENDED THAT DEDUCTION BE ALL OWED U/S.10B IN RESPECT OF ITEMS WHICH WERE OTHERWISE ELIGIBLE. 12. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD WE FIND THAT THE FIRST ITEM OF RS.2,11,721 I S SALARY CHEQUES OUTSTANDING FOR MORE THAN SIX MONTHS REVERSED. THE LEARNED A.R. CON TENDED THAT THE AMOUNT OF SALARY DEBITED TO THE PROFIT AND LOSS ACCOUNT INCLU DED THE AMOUNT OF SALARY FOR WHICH CHEQUES WERE NOT ENCASHED. HOWEVER NO DETAIL WAS FILED IN THIS REGARD. BE THAT AS IT MAY IF IT IS, IN FACT, THE SALARY DEBI TED TO THE PROFIT AND LOSS ACCOUNT FOR THE YEAR IN QUESTION WHICH HAS BEEN CREDITED TO MIS CELLANEOUS INCOME FOR NON ENCASHMENT OF CHEQUES IT WOULD TEND TO REDUCE THE SALARY EXPENDITURE ITSELF. THE ITA NO.4316/MUM/2009 M/S.TRICOM INDIA LIMITED. 8 ASSESSING OFFICER IS DIRECTED TO VERIFY THIS FACT A ND THEN DECIDE ACCORDINGLY. INSOFAR AS THE MISCELLANEOUS INCOME, INTEREST ON INCOME-TAX REFUND, SCRAP SALES AND INTEREST ON ALLOTMENT OF SHARES IS CONCERNED, THESE AMOUNTS CONSTITUTE MISCELLANEOUS INCOME NOT DERIVED FROM ELIGIBLE UNDERTAKING AND HE NCE ARE NOT ELIGIBLE FOR DEDUCTION U/S.10B IN LINE WITH THE FINDING RECORDED BY THE TRIBUNAL IN EARLIER YEAR. THERE IS AN AMOUNT OF RS.3,73,689 REPRESENTING PRIO R YEARS INCOME BEING PROVISION FOR LEAVE ENCASHMENT PAYABLE REVERSED. TH E CONTENTION OF THE ASSESSEE FOR ALLOWING DEDUCTION ON THIS AMOUNT IN LINE WITH THE DIRECTION FOR RETURN OF SALARY CHEQUES CANNOT BE ACCEPTED ON THE GROUND THAT THIS IS THE REVERSAL OF PROVISION FOR LEAVE ENCASHMENT WHICH WAS MADE IN AN EARLIER YEAR. THERE IS NO DEBIT TO THE PROFIT AND LOSS ACCOUNT IN THIS YEAR WHICH COULD BE REDUCE D BY THIS AMOUNT. WE, THEREFORE, HOLD THAT THE ASSESSEE CANNOT BE ALLOWED DEDUCTION U/S.10B IN RESPECT OF THIS AMOUNT AS WELL. THIS GROUND IS, THEREFORE, PARTLY A LLOWED FOR STATISTICAL PURPOSES. 13. GROUND NO.2 IS AGAINST THE CONFIRMATION OF DISA LLOWANCE OF RS.48,34,412 BEING THE AMOUNT PAID TOWARDS EMPLOYEES CONTRIBUTI ON TO PROVIDENT FUND AND ESI BEYOND THE DATE UNDER THE RESPECTIVE ACT BUT BEFORE THE DUE DATE FOR FILING THE RETURN OF INCOME U/S.139(1) OF THE ACT. A CHART HAS BEEN PREPARED ON PAGE 20 OF THE PAPER BOOK SHOWING THE DUE DATES FOR PAYMENT VIS- -VIS ACTUAL DATES OF PAYMENT OF CHALLAN. FROM THESE DETAILS IT CAN BE SEEN THAT THE LAST PAYMENT MADE IS ON 19.05.2006. THE DUE DATE FOR FILING RETURN FOR THIS YEAR IS 31 ST OCTOBER, 2006. HENCE ALL THE PAYMENTS HAVE BEEN MADE BEFORE THE DU E DATE U/S.139(1) AND RESULTANTLY NO DISALLOWANCE IS WARRANTED ON THIS SC ORE. OUR VIEW IS SUPPORTED BY THE JUDGEMENT OF THE HONBLE SUPREME COURT IN CIT VS. ALOM EXTRUSIONS LTD. [(2009) 319 ITR 306 (SC)] AND THAT OF THE HONBLE DELHI HIGH COURT IN CIT VS. AIMIL LTD. [(2010) 321 ITR 508 (DEL.)] , IN WHICH IT HAS BEEN HELD THAT NO DISALLOWANCE CAN BE MADE U/S.36(1)(VA) OR SECTION 4 3B WHERE THE EMPLOYERS OR ITA NO.4316/MUM/2009 M/S.TRICOM INDIA LIMITED. 9 EMPLOYEES CONTRIBUTION IS PAID BEFORE THE DUE DATE OF FILING THE RETURN U/S.139(1) OF THE ACT. WE, THEREFORE, ORDER FOR THE DELETION O F THIS ADDITION. 14. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT GROUND NO.3 BE TREATED AS INFRUCTUOUS. THIS GROUND IS, THEREFORE, DISMISSE D AS SUCH. 15. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 24 TH DAY OF NOVEMBER, 2010. SD/- SD/- ( V.DURGA RAO ) ( R.S.SYAL ) JUDICIAL MEMBER ACC OUNTANT MEMBER MUMBAI : 24 TH NOVEMBER, 2010. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) CENTRAL - III, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.