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2018 (5) TMI 60 - AT - Income TaxDisallowance u/s 40A(3) - Held that:- Having regard to the details of the payments made in cash, we find that some of the payments are to the employees of the assessee company. We find that any payment made by a company to its employees for incurring expenditure on its behalf for business of the company, cannot be disallowed u/s 40A(3) of the Act. Therefore, we deem it fit and proper to remit the issue to the file of the AO for verification of the above contention of the assessee and on verification if it is found that the payments are to the employees for meeting the expenditure of the assessee company, the AO shall not make any disallowance u/s 40A(3) to such an extent. Disallowance u/s 40a(ia) - Held that:- Hon'ble Delhi High Court in the case of CIT vs. Ansal Land Mark Township (2015 (9) TMI 79 - DELHI HIGH COURT) has considered the applicability of the second proviso to section 40a(ia) and has held to be declaratory and curative and to have retrospective effect from 1.4.2005. The assessment order before us is the A.Y 2008-09. In view of the above provision and since the assessee has not been treated as an “assessee in default” u/s 201(1) of the Act, we hold that no disallowance u/s 40a(ia) can be made. Disallowance u/s 43B of the payments made towards APGST, VAT, ESI, Professional Tax Payable - Held that:- The amounts disallowed by the AO are the statutory provisions made by the assessee. The assessee’s contention that these amounts have not been debited to the P&L A/c needs verification. Therefore, we deem it fit and proper to remit this issue to the file of the AO for verification of the assessee’s claim and if the assessee has not debited the same to the P&L A/c, then no disallowance should be made u/s 43B of the Act. This ground of appeal is treated as allowed for statistical purposes.
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