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2018 (4) TMI 1279 - AT - Income TaxAddition on account of entertainment expense - providing foods to clients and customers as a part of business courtesy - membership in the club on behalf of assessee-company - Held that:- Genuineness of the expense cannot be doubted. Similarly considering the volume of business of assessee, in terms of its clients, number of sites we are of the view the expenses claimed by assessee have been incurred only in connection with assessee’s business. We also do not agree with the finding of AO that the assessee being a Central Govt. PSU does not require to provide hospitability services to its clients. It is because in any organization, the expenditure are incurred for attending clients meetings etc., these expenses are unavoidable in all the organization be it private organization or Government PSU. There is no allegation of the AO that the above expenses have been incurred by assessee in unauthorized manner. Therefore, we are of the view that above expense deserves to be allowed. - Decided in favour of assessee Addition on account of contribution to employees PF - Held that:- There is no doubt the payment that the payment for the employee provident fund was made before the due date of furnishing the return of income as specified under section 139(1) of the Act. Thus the same cannot be added to the total income of the assessee in view of judgment of Hon'ble jurisdictional High Court in the case of CIT v. M/s Vijay Shree Limited [2011 (9) TMI 30 - CALCUTTA HIGH COURT] - Decided in favour of assessee Addition on account of Leave Travel Concessions (LTC) - Held that:- There is no doubt that assessee has made a reference during the hearing before Ld. CIT(A) to the report of actuarial valuation but same has not been placed in the paper book filed before us. Assessee has not produced the copy of the report of actuarial valuation for the LTC. Therefore, we are inclined to remit the matter back to the file of AO for fresh adjudication in accordance with law as well as after considering the principle laid down by Hon'ble Supreme Court in the case of Rotork Controls India (Pvt) Ltd. (2009 (5) TMI 16 - SUPREME COURT OF INDIA) as discussed above. It is also directed to assessee at liberty to produce necessary documents including the actuarial valuation report. The AO shall pass a speaking order in terms of above. Revenue’s ground is allowed for statistical purpose. Allowing deduction of the expense incurred on tools & tackles by 1/5th instead of 15% depreciation as per the provision of Section 32 - allegation of AO is that there is no concept of claiming deduction under the Act on deferred revenue basis / useful life of inventory - Held that:- Assessee has correctly amortized the expenditure incurred on tools and tackles inventory over a period of 5 years. The period of 5 years was decided on the basis of technical report evaluated by the Engineering Department. Ld. DR has not brought any defect in the technical evaluation report of Engineering Department. Therefore, we are inclined to upheld the order of Ld. CIT(A).
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