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2018 (12) TMI 1872 - ITAT JAIPURAddition towards contribution to the State Renewal Fund - HELD THAT:- As relying on own case [2017 (8) TMI 1382 - ITAT JAIPUR] State Renewal Fund was set up to provide safety to the employees working under the state owned entities in case of restructuring/wind-up/closure of the undertaking. Based on the study done by the State Government, the assessee has provided an amount of ₹ 20 lacs for the purposes of welfare and benefit of the employees. As following case of Principal CIT vs Rajasthan State Seed Corporation Ltd 2016 (9) TMI 59 - RAJASTHAN HIGH COURT] we affirm the order of the CIT(A) who has rightly deleted the disallowance made by the AO towards contribution to State Renewal Fund. Disallowance for depositing the employees contribution to PF & ESI beyond the prescribed time limit provided in respective Act - Whether the employees contribution to PF & ESI are governed by the provisions of section 43B and not by section 36(1)(va) r.w.s. 2(24)(x) of the IT Act.? - HELD THAT:- Admittedly, the employees’s contribution to PF has been paid before the due date of filing of return of income u/s 139(1) of the Act. The issue is no more res integra in light of various judicial pronouncements of M/S. STATE BANK OF BIKANER & JAIPUR AND JAIPUR VIDYUT VITARAN NIGAM LTD. [2014 (5) TMI 222 - RAJASTHAN HIGH COURT], M/S. UDAIPUR DUGDH UTPADAK SAHAKARI SANGH LIMITED, UDAIPUR [2014 (8) TMI 677 - RAJASTHAN HIGH COURT] and JAIPUR VIDYUT VITRAN NIGAM LTD AND RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM LTD [2014 (1) TMI 1085 - RAJASTHAN HIGH COURT] - We accordingly affirm the order of the ld CIT(A) who has rightly deleted the disallowance made by the AO towards employees contribution to PF. Disallowance of energy conservation fund - expenses was not incurred wholly and exclusively for the business purchases and it is only application of income - HELD THAT:- As relying on own case [2017 (8) TMI 1382 - ITAT JAIPUR] the disallowance on account of contribution to energy conservation fund made by the Assessing Officer is directed to be deleted. This ground is allowed. Addition of contribution to Rajasthan Bhawan - HELD THAT:- Assessee got the rebate of 75% as well as the right to use the accommodation by its officers/employees visiting Mumbai. Accordingly, in view of the fact that the assessee has received the benefit in the shape of accommodation against the said expenditure for construction of Rajasthan house, we hold that the claim of the assessee is an allowable expenditure u/s 37(1) of the Act and the AO is directed to allow the same. In view of the same, ground no. 1 of assessee’s appeal is allowed. Disallowance of 50% of the expenses incurred on publicity and advertisement - Addition on the ground that in lot of entries, details of expenditure are not appearing in the ledger account without providing opportunity to furnish such detail ignoring the explanation given about the nature of the expenditure incurred which is wholly and exclusively for the purpose of business - HELD THAT:- The matter is remanded to the file of the AO to examine the details of expenditure incurred under the head publicity and advertisement after providing reasonable opportunity to the assessee. In the result, the ground is allowed for statistical purposes. Disallowance of the prior period expenditure on the ground that it could not be ascertained whether the expenses crystallized in the previous year or not - HELD THAT:- The incurrence of expenditure for the purposes of business is not been disputed by the Revenue. Further, the ld AR has explained that the expenditure has been booked after seeking the approval from the competent authority during the year and the same is consistent with the accounting practice of booking the expenses in earlier years. We accordingly donot see any basis for disallowance of the expenditure so claimed by the assessee. In view of the same, the AO is directed to allow the same and the ground no. 3 of assessee’s appeal is allowed. Disallowing the claim of deduction u/s 80IA - Excluding the indirect income but at the same time not excluding the indirect expenses - HELD THAT:- Firstly, it is not under dispute that revenues in form of sales of services, FDR interest income and other income are not eligible for deduction u/s 80(IA) and hence, the said action of the AO is hereby confirmed. The second issue relates to allocation of indirect expenses incurred at the Head office in form of employees and administrative/establishment expenses. The ld AR has contended that the assessee has worked out the allocation of indirect expenses as per the directions of the Coordinate Bench in AY 2011-12 and as per its working, the indirect expenses allocable to the eligible undertakings amounts to ₹ 18,49,771. Further, taking the same into account, as per the revised working, it is eligible for deduction u/s 80IA at ₹ 8,56,70,349 as against original claim of ₹ 12,21,63,337. The matter is accordingly set-aside to the file of the AO to examine and verify the said revised working so furnished by the assessee available at assessee’s paperbook pages 7-8 after providing reasonable opportunity to the assessee, and where the same is found to be in compliance with the directions of the Coordinate Bench referred supra, allow the same to the assessee. In the result, the ground of appeal is allowed for statistical purposes.
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