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2016 (12) TMI 953 - AT - Income TaxDisallowance being loss on foreign exchange incurred on trading liabilities - Held that:- We find that the assessee has, albeit, filed copy of account of Foreign exchange loss, but, the same does not indicate the nature of transactions on which such foreign exchange loss was incurred. There is no discussion in the assessment order about the nature of loss. Since such details were also not available before the ld. CIT(A) enabling him to categorize the foreign exchange loss in respect of trading items and loan taken for acquiring capital assets, and the same are absent before us as well, we set aside the impugned order and remit the matter to the file of AO for ascertaining the nature of foreign exchange loss. To the extent such foreign exchange loss/gain relates to trading transactions, the same should be taken as a revenue item and hence deductible/chargeable to tax. The other part relating to acquisition of capital asset should be taken as a capital expenditure, not eligible for deduction. Needless to say, the assessee will be allowed an opportunity of hearing in such fresh proceedings. Addition being the payments made towards Employees and Employer’s Provident Fund contribution - delay ranging between one to four/six days in depositing the amounts - Held that:- Both the employer’s and employees’ contribution are allowable as deduction if the amount of provident fund etc., though belatedly, but is paid before the due date of filing of return u/s 139(1) of the Act. Adverting to the facts of the instant case, it is seen as an admitted position that the assessee deposited its and employees’ share in EPF etc. before the due date u/s 139(1) of the Act. Thus we order for the deletion of the addition. See CIT v. Alom Extrusions Limited [2009 (11) TMI 27 - SUPREME COURT ] and CIT v. Aimil Limited [2009 (12) TMI 38 - DELHI HIGH COURT Non deduction of tds - Held that:- On a query about the details and evidence for such deduction of tax at source by customers, the ld. AR failed to furnish the same and corroborate the version of tax deducted at source by the customers without furnishing any TDS certificates. In the absence of the foundation of the deduction of tax at source by customers, we are unable to accept the assessee’s contention for allowing deduction. Disallowance being tax paid on salaries of employees under protest - Held that:- The assessee was made liable to pay a sum of ₹ 1,50,000/- on account of TDS which the assessee deposited under protest. It is obvious that the amount of TDS paid by the assessee is in respect of services rendered by the employees on which tax was not deducted, is a sort of perquisite, which if paid so would have been deductible as revenue expenditure. As such, the amount of ₹ 1,50,000/- has to be allowed as deduction if it was paid and not refunded to the assessee. On a pertinent query, both the sides did not have an idea about the order passed by the Tribunal, if any, against the order u/s 201(1) creating demand of ₹ 1,50,000/-. We, therefore, direct the AO to allow deduction for ₹ 1,50,000/- in the year. If such demand has been erased by the Tribunal in subsequent proceedings, then, the amount so refunded should be charged to tax in the relevant year. Addition being excess deposit of TDS amount on salaries to employees - Held that:- We find that the assessee has set up a case that a sum of ₹ 37,431/- was paid in excess of the liability and no TDS certificates were issued to any of the deductee employees. Suppose salary of ₹ 100 is due to an employee on which tax liability is ₹ 15, the employer will deduct and deposit ₹ 15 with the exchequer and pay ₹ 85 to the employer. If, by mistake, the employer deducts ₹ 20 instead of ₹ 15, ordinarily, the TDS certificate should be given for ₹ 20/- and the remaining sum of ₹ 80/- should be paid to the employee. What the assessee is contending before us is that it paid ₹ 85/- to its employees, but, deducted and paid TDS of ₹ 20/- to the exchequer. This position, if correct, calls for allowing deduction in respect of ₹ 5 (Rs.20-Rs.15), being an amount incurred during the course of business. However, if the employee is paid ₹ 80/- after deduction of ₹ 20/- as TDS, as against the correct liability of ₹ 15, then, of course, there can be no deduction for the remaining sum of ₹ 5/-. As the facts are not borne out from the record or impugned order, we, therefore, set aside the impugned order and remit the matter to the file of the AO for deciding it in accordance with our above observations As regards the excess amount being payment of Provident Fund in excess of the actual liability, the same has to be allowed as deduction being an expenditure incurred in carrying on the business.
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