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2016 (7) TMI 1471 - AT - Income TaxDisallowance u/s. 40(a)(ia) - Assessee receives advertisement revenue and as part of receipt, commission amount was paid out of the amounts received - CIT(A) relying on many other cases in assessee case, the disallowance was deleted - Held that:- No reason to interfere with the order of the Ld. CIT(A) as it is in compliance to the order of ITAT in earlier years. Moreover, CBDT also has recently issued a Circular bearing F.No. 275/2006/2016-IT(B) dt. 29-02-2016 clarifying that TDS is not required to be made on payments made by TV channels/News paper companies to the advertising agency for booking or procuring or canvassing for advertisement. In view of that, we do not see any reason to defer from the findings. This Ground is rejected. Disallowance of depreciation on computer accessories - Held that:- This issue is covered against the department by the orders of ITAT in earlier years. Since accessories like printers, scanners and modems etc., are part of computer machinery, Assessee is eligible for depreciation at 60%. Accordingly, the ground is rejected. Disallowance of employees contribution to ESI - AO disallowed the above amount holding that the amounts were paid beyond the due date - Held that:- As relying on assessee's own case since the payments are made within the year, the amendment brought to the Act is equally applicable. Therefore, there is no merit in Revenue’s ground. Disallowance of prior period expenses - Held that:- Assessee it seems paid an amount of ₹ 19,00,263/- in the immediately preceding previous year from the group gratuity premium which related to period 01-11-2009 to 31- 10-2010. Part of the amount pertaining to earlier year was claimed in financial year 2009-10 and balance ₹ 11,14,301/- in the current year. Since the payment was made in the earlier year, it was accounted as ‘prior period expenditure’ but the amount pertains to the current year’s liability. Accordingly, we do not find any reason to defer from the findings of the Ld. CIT(A). As regards the amount of ₹ 9,36,420/-, it was found that the same related to excess billing of earlier years reversed in the current year. Relying on the decision of the Co-ordinate Bench of ITAT in assessee’s own case for AY. 2007-08 [2014 (1) TMI 250 - ITAT HYDERABAD] Ld. CIT(A) deleted the disallowance. We do not see any reason to interfere with such order. Disallowance of payment to Employees’ Group Gratuity Scheme - AO disallowed on the ground that the schemes to which assessee contributed the amounts were approved w.e.f. 18-08-2011 - Held that:- After taking into account the amounts appropriated towards premium for employees’ group insurance and gratuity, payments made during the year and also after adding interest received, net amount of ₹ 1,35,67,598/- was transferred to the accounts of demerged companies including the unpaid liability. The demerged companies viz., Eenadu Television Pvt. Ltd., Prism TV Pvt. Ltd., and Panorama TV Pvt. Ltd., reflected the payments in their books. Since the amount was transferred to the account of demerged companies and since there was no claim for deduction for the impugned amount in computing total income in assessee’s case, the order of CIT(A) is to be upheld. As assessee submitted additional evidence to explain the entries in assessee books and its demerged companies, we are of the opinion that this can be examined by the AO.
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