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2020 (6) TMI 171 - AT - Income TaxDeduction u/s 80P(2) - carry forward loss - Addition towards interest earned, assessed as income from other sources - HELD THAT:- We find from the statement of facts submitted by the assessee before the CIT(A) that the assessee is obtaining loan from Government for attaining the objects. The assessee keeps the fund in the manner of fixed deposit till the distribution of the said funds to the eligible recipients. However, it is not clear from the orders of the authorities below that how much amount was kept as surplus fund and how much amount has been kept for the distribution to the eligible recipients and which has not been distributed till the date and kept as fixed deposit out of loan funds. Therefore, this matter is sent back to the file of AO to determine as to whether the assessee had actual surplus funds which has been made as fixed deposit. The AO is also directed to examine the source of fixed deposit. If it is found that the fixed deposit has not been made from surplus funds or it has been made from the own funds which were kept for marketing assistance not immediately disposable in the form of marketing assistance to craftsmen and are also not available for otherwise use by the assessee, the AO is directed to give the benefit of deduction u/s.80P(2)(d) to the assessee. Needless to say, the assessee shall be given reasonable opportunity of hearing - Decided in favour of assessee for statistical purposes. Disallowance of ESI & EPF contributions - assessee has not deposited the contribution of EPF and ESI within the due date - HELD THAT:- We found substance in the submissions of the ld. DR that Section 36(1)(va) of the Act deals with the deduction in respect of the sum received by the assessee from any of his employees to which the provisions of sub-section 2(24)(x) of the Act applies, provided such sum is credited by the assessee to the employee’s account in relevant fund on or before the due date. The ‘due date’ is defined under the Explanation to section 36(1)(va) of the Act by stating that the due date referred under the relevant Act and certainly not the due date for filing the return. This very similar issue has also been decided in the case of Milind Gupta [2019 (10) TMI 128 - ITAT CUTTACK] wherein the Tribunal has restored the issue to the file of AO to examine the contributions made with reference to the dates when they were actually made and grant relief to such of claim which qualified for such relief in terms of prevailing provisions of the Act.- Decided in favour of assessee for statistical purposes. Addition made on adhoc basis - Assessee incurred expenses under different heads - HELD THAT:- As during the course of assessment proceedings, the AO noticed that the assessee has incurred expenses under different heads i.e. packing materials, miscellaneous expenses and printing and statutory expenses but the assessee was failed to furnish the documentary evidence in support of his claim but these are the incidental expenses to be incurred by the assessee considering to the nature of business of the assessee but for want of production of desired evidence of expenses, the AO has rightly disallowed 10% of the total expenditure incurred which has been upheld by the CIT(A) also. If the assessee was unable to produce the required document before the AO, he had an opportunity to produce the same in support of his claim of expenses debited into the profit and loss account under the aforesaid heads before the CIT(A) but the assessee could not do so. Therefore, the CIT(A) has rightly upheld the action of AO. No reason to interfere with the observations of the CIT(A) in this regard and we uphold the same. This ground of appeal of the assessee is dismissed. Addition on account of presumptive basis - HELD THAT:- AO during the course of assessment proceedings that the assessee has claimed the expenses as allowable expenditure claimed u/s.37(1) of the Act, however, the AO disallowed the same stating that the expenditure claimed by the assessee does not relate to the business of the assessee towards earning of the income as per Section 37(1) of the Act. It is also not an incidental expenses to earn the income of the assessee which rightly been confirmed by the CIT(A). Accordingly, we do not see any reason to interfere with the observations of the CIT(A) in this regard and we uphold the same. This ground of appeal of the assessee is dismissed. Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited [2020 (5) TMI 359 - ITAT MUMBAI]
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