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2021 (1) TMI 357 - AT - Income TaxDisallowing provision made for privileged leave encashment - provision was made on actual valuation, treating the same as contingent liability - assessee is a regional rural bank established under Rural Banks Act and is a scheduled bank classified under second Schedule of RBI, having several Rural Branches - According to the AO, the claim for deduction cannot be allowed in view of clause (f) to section 43B which was inserted by Finance Act, 2003 - HELD THAT:- We find that the Hon'ble Supreme Court has reversed the decision of the Hon'ble Calcutta High Court in the case of Exide Industries Ltd. & Anr. [2007 (6) TMI 175 - CALCUTTA HIGH COURT ] and has upheld the constitutional validity of section 43B(f) of the Act. In view of the provision of section 43B(f) of the Act, which provides that any sum payable by the assessee as an employer in lieu of any leave at the credit of his employee shall not be allowed as deduction, unless it is actually paid and deduction is allowed only in the previous year in which the sum is actually paid, the claim made by the assessee for deduction cannot be sustained. We therefore uphold the order of CIT (Appeals) and dismiss ground No. 2. Disallowance provision made for bad and doubtful debts u/s. 36(1)(viia) - CIT (Appeals) confirmed the order of AO as the assessee could not produce the required evidence before the CIT(A) also - HELD THAT:- As assessee, however, pointed out that in AYs 2011-12 to 2012-13 ITAT remanded the issue with a direction to the assessee to file the required details in the prescribed form and directed the AO to examine the issue afresh. In such circumstances, we set aside the order of CIT (Appeals) and restore the issue to the AO with a direction to the assessee to file the necessary details to establish its claim for deduction as required under Rule 6ABA of the Rules. Disallowing u/s. 40(a)(ia) - Payment to contractors AND Payment of professional fee - AO was of the view that the aforesaid payments fall under the provisions of section 194C and 194J of the Act respectively - assessee has contended that it had obtained Form 15G & 15H in respect of amount paid to contractors - HELD THAT:- If the AO accepts the contention of assessee that expenditure was capitalized, then there is no necessity to examine the filing of Form 15G & 15H. The AO is therefore directed to verify whether the expenditure claimed is capital expenditure and if so, delete the addition. If the same has been claimed as revenue expenditure, then the assessee should be permitted to file Form 15G & 15H so that TDS obligation can be said to be non-existent. Accordingly, ground No. 5 is treated as allowed for statistical purposes.
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