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2021 (7) TMI 1389 - ITAT MUMBAIIncome from other sources - Interest earned on FD made out of unutilised grants - HELD THAT:- As decided in own case [2021 (6) TMI 212 - ITAT MUMBAI] Government directive which has been relied upon by him is duly applicable for the current assessment year. As per the said direction the interest on unutilised grant has to be treated a part of the grant itself. Hence, it cannot be subject to tax by the Revenue. Disallowance revenue grant received by the assessee company - HELD THAT: - We noted that this revenue grant in aid is already covered by Tribunal’s decision in assessee’s own case [2021 (6) TMI 212 - ITAT MUMBAI] for earlier assessment years. The facts being similar and Revenue now before us could not point out any different in facts or legal position. Nothing contrary was brought to our notice, we uphold the order of CIT(A). This issue of Revenue’s appeal is dismissed. Bad debts written off disallowed - HELD THAT:- DR could not controvert the finding of CIT(A) but argued that the assessee has made mere provision for bad debts which is not deductible and for this, she relied on the assessment order. Before us assessee stated one fact that the assessee has obliterated the provision that bad debts in the books of accounts by reducing the same from balance of debtors and had shown the net balance of debtors on the asset side of the balance sheet. He stated that the issue is squarely covered by the decision Vijaya Bank [2010 (4) TMI 46 - SUPREME COURT] and also Jain insurance corporation of India [2000 (9) TMI 13 - BOMBAY HIGH COURT] wherein it is observed that ‘writing off’ is a technical term and means raising a debit entry to the P&L Account and the corresponding credit may be given either to debtors or to reserve for bad debts. Further the court has observed that where the assessee has debited P&L account and has credited reserve for bad debts, the same would be sufficient for claiming deduction under section 36(1)(vii) of the Act.This issue of Revenue’s appeal is dismissed. Employees contribution to provident fund beyond due date of respective statute - HELD THAT:- As decided in SALZGITTER HYDRAULICS PRIVATE LIMITED [2021 (6) TMI 1059 - ITAT HYDERABAD]provident fund contribution received from employees deposited by assessee before the due date of filing of return under section 139(1) of the Act but after the due date prescribed in the relevant statute of provident Fund Act is to be allowed despite the fact that legislation has not only incorporated necessary amendment in section 36(1)(va) of the Act by inserting explanation 2 as well as explanation 5 to section 43B vide Finance Act, 2021 with effect from 01.04.2021, wherein it is clarified that the provisions of section shall not apply and shall be deemed to have been applied to a sum received by assessee from any of his employees covered by section 2(24)(x) of the Act because this explanations are prospective and not retrospective. We are of the view that the legislative amendments incorporated in section 36(1)(va) and 43B of the Act by the Finance Act, 2021 by inserting explanation 2 and explanation 5 to the respective provisions, are prospective in application with effect from 01.04.2021. Hence, we find no infirmity in the order of Commissioner of Income Tax (Appeals). Hence, the appeal of the Revenue is dismissed. Penalty u/s 271(1)(c) - addition of interest on unutilized grant in aid - HELD THAT:- As quantum addition is deleted, hence, the penalty will not survive. Therefore, CIT(A) has rightly deleted the penalty and we confirm the same. The appeal of Revenue is dismissed.
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