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2021 (4) TMI 393 - AT - Income TaxAddition on account of late deposit of ESIC & PF - assessee company has not deposited the employees’ contribution within the due date which is prescribed under the said statute i.e. Provident Fund and ESIC - HELD THAT:- This issue is dealt by the Hon’ble Delhi High Court in case of CIT vs. M/s Bharat Hotels Ltd. [2018 (9) TMI 798 - DELHI HIGH COURT] wherein the issue is decided in favour of the Revenue, without considering the decision of the Hon’ble Delhi High Court in case of CIT vs. AIMIL Ltd.[2009 (12) TMI 38 - DELHI HIGH COURT] - But the Ld. AR relied upon the decision of the Hon’ble Delhi High Court in case of Pr. CIT vs. Pro Interactive Service (India) Pvt. Ltd. [2018 (9) TMI 2009 - DELHI HIGH COURT] wherein the Hon’ble High Court decided the issue in favour of the assessee relying upon the judgment of AIMIL Ltd. (supra). The Hon’ble Delhi High Court held that the legislative intent was/is to ensure that the amount paid is allowed as expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee’s Provident Fund (EPD) and Employee’s State Insurance Scheme (ESI) as deemed income of the employer under Section 2(24)(x) of the Act. It is settled law that when two judgments are available giving different views then the judgment which is in favour of the assessee shall apply as held in case of Vegetable Products Ltd[1973 (1) TMI 1 - SUPREME COURT] by the Hon’ble Supreme Court. Hence, in light of the latest decision in case of Pro Interactive Service (India) Pvt. Ltd., the issue is covered in favour of the assessee. Allowability of sales promotion expenses and Diwali Expenses - allowable business expenses or not? - HELD THAT:- The assessee has given details as to how these expenses are related to the business expenses. The CIT(A) has given a detailed finding to that effect.There is no need to interfere with the findings of the CIT(A). Hence, Ground No. 2 is dismissed. Addition on account of expenditure incurred on Corporate Social Responsibility - HELD THAT:- As in case of National Seeds Corporation Ltd. Vs. Additional CIT[2018 (4) TMI 335 - ITAT DELHI] it has been categorically held that the Explanation (2) of Section 37(1) was inserted w.e.f. 1st April 2015 and cannot be construed as to assessee’s disadvantage in respect of the period prior to this amendment and thus, supports the case of the assessee. Hence, Ground No. 3 is dismissed. Addition u/s 14A read with rule 8D - HELD THAT:- It is clear finding in assessment order as well as by the CIT(A) that there is no exempt income earned by the assessee during the year. Hence, the decision of the Hon’ble Delhi High Court in case of Cheminvest Ltd. [2015 (9) TMI 238 - DELHI HIGH COURT] will be applicable. Hence, Ground No. 4 is dismissed. Provision for carbon credits - As assessee admitted that the provision of carbon credits was inadvertently included in the taxable income of the assessee, though the same is not taxable under the Act - HELD THAT:- Assessee submitted the basis for creation of said provision by submitting the calculation of provision, basis for the same and a certification report and these documents were verified by the Assessing Officer. In remand report dated 11.09.2015, the Assessing Officer observed that the provision of carbon credits has been written off in the subsequent year i.e. A.Y. 2012-13 which was disallowed by the Assessing Officer in the assessment order for the said year. AO has also further observed that no taxable event has occurred or accrued to the assessee in the year under consideration. The assessee has also given a proper reasoning as to why the evidences were not before the Assessing Officer at the time of assessment proceedings. CIT(A) has rightly accepted those evidences and has taken cognizance of the remand report filed by the Assessing Officer wherein it is observed that no taxable amount has incurred in the present Assessment Year and provisions has been written off in subsequent years. Therefore, there is no need to interfere with the finding of the CIT(A). Hence, Ground No. 5 & 6 are dismissed.
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