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2014 (1) TMI 1889 - AT - Income TaxRectification u/s 254 - whilst upholding the disallowance made by AO and affirmed by the CIT(A) pertaining to ex-gratia payments made to its employees, the ‘tribunal’ did not consider the case laws pleaded in the grounds - HELD THAT:- It emanates to us that whilst deciding the assessee’s appeal for assessment year 2006-07, we had confirmed the impugned disallowance by holding that the payments in question are nothing but bonus which is only an appropriation of the profits. A perusal of the pleadings raised by the assessee in its grounds reveals that it had also quoted various case laws in support of the arguments. Admittedly, the same have nowhere been taken up in the order sought to be modified/rectified. Accordingly, to this limited extent, we recall our order to re-examine the assessee’s contentions on merits. Disallowance on merits, the only reason stated right from Assessing Officer till the ‘tribunal’ has been that the payment of ex-gratia amounts to bonus in the nature of appropriation of profits. From the case law quoted by the assessee in CIT vs National Engineering Industries Ltd. [1993 (7) TMI 40 - CALCUTTA HIGH COURT] it turns out that such a payment is allowable as expenditure. Therefore, the assessee’s corresponding ground in the appeal is decided against the Revenue and the disallowance in question is deleted. MP allowed.
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