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2020 (2) TMI 981 - ITAT CUTTACKClaim of provisions made towards contingent and unascertained expenditure disallowance - admissibility of provisions created for unforeseen and unascertained expenditure - liabilities to pay arrear salary to the employees as per the recommendation of 6th Pay Commission - CIT-A deleted the addition - HELD THAT:- CIT(A) while dealing with the issue has observed that the Board of Directors of assessee company on 323rd meeting held on 23.12.2008 has constituted a committee to examine and recommend the revision of sale of pay of the employees of IKIWL and IFCAL w.e.f.01.01.2006 in the line with State Government employees. The committee has mentioned that the corporation is in a position to bear the additional financial burden and the amount payable in F.Y.2008-2009 is crystallized when the Board of Directors of assessee company and the committees of the Board had taken the decision on 11.02.2009 & 16.02.2009 on the basis of ascertained liabilities to pay arrear salary to the employees as per the recommendation of 6th Pay Commission w.e.f. 01.06.2006. CIT(A) has rightly allowed the deduction towards pay revision debited to the profit and loss account holding the same as ascertained liability crystallized during the year under consideration. No good reason to interfere with the observations of the CIT(A) in deleting the addition so made by the AO on account of admissibility of provisions created for unforeseen and unascertained expenditure. Disallowance of write off of doubtful loans and advance to subsidiary - proper accounting treatment has not been given in the books of account for write off of advance - vehemently argued by ld. AR that in the said additional information the 1st column contains Opening Balance; 2nd column contains advance Released; 3rd column contains Advance refunded; 4th column contains Advance written off and 5th column contains closing Balance. Hence, the position of opening balance and closing balance is now clear - HELD THAT:- We set aside the impugned order passed by CIT(A) and remit the matter to the file of CIT(A) to pass a fresh order after considering the submissions of the assessee as well as the documents filed by the assessee in the form of paper book before us. Needless to say, the assessee shall be given due opportunity of hearing. The assessee is also directed to cooperate the CIT(A) in early disposal of the case.
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