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2022 (8) TMI 361 - HC - Income TaxDisallowance of consumption incentive - disallowance of the expenses claimed under the head ‘consumption debtors’ the said addition was made by the AO on the ground that these expenses are in the nature of a provision - HELD THAT:- As evident from the record that the aforesaid disallowance has been deleted by the CIT(A) and ITAT, after considering the material on record and satisfying itself that it is an ascertained liability of the assessee which is liable to be allowed. This is a finding of fact returned by CIT(A) and upheld by ITAT. The chart filed by the Respondent evidencing that this expense was consistently allowed since AY 2004-05 and allowed by the AO is also not in dispute. The “consistency” rule has been enunciated in M/s Radhasaomi Satsang, Saomi Bagh, Agra [1991 (11) TMI 2 - SUPREME COURT] - no infirmity in the order passed by ITAT upholding the decision of CIT(A) deleting the disallowance on account of ‘consumption debtors’. Disallowance u/s 14A - Expenditure incurred on earning exempt income - HELD THAT:- As per the law settled by this court in the case of Cheminvest Ltd. [2015 (9) TMI 238 - DELHI HIGH COURT] and PCIT vs. IL & FS Energy Development Company Ltd.[2017 (8) TMI 732 - DELHI HIGH COURT] the disallowance to be made under Section 14A cannot be in excess of the exempt income earned by the assessee. The counsel for the revenue has placed reliance on the CBDT circular 5/2014 to contend that disallowance u/s 14A would be attracted even if corresponding exempt income is not earned during the financial year. The said circular cannot be relied upon since its contrary to the law laid down by this Court. There is no challenge to the finding of the CIT (A) and the ITAT that AO failed to record satisfaction before invoking the provisions of Section 14A which is the condition precedent for making the addition. In this view of the matter the additional disallowance made by the AO is impermissible and contrary to law. ITAT was correct in upholding the order of the CIT(A) deleting the disallowance. Disallowance u/s 36(1)(va) on account of late deposit of employee's contribution to PF - Scope of amendment - HELD THAT:- Memorandum acknowledges that courts have taken a view that the 'due date' to be considered for the purposes of Section 36(1)(va) of the Act is under Section 43B and it is in that background that the Explanation has been inserted to alter this position. Further, the Memorandum explicitly stipulates that the said amendment will take effect from 1st April 2021 and it cannot therefore cannot apply to assessment year 2012-13 under consideration. The legislature is therefore conscious that the Explanation seeks to change the law as it stands on date and is therefore intended to apply to subsequent assessment years. The contention of the revenue therefore that the said amendment is retrospective cannot be accepted. amendment to Section 36(1)(va), which is 'for removal of doubts', cannot be presumed to be retrospective even where such language is used, if it alters or changes the law as it earlier stood. It is also noted that in the facts of the case, the due date for depositing the Employees’ contribution to the Provident Fund was 20th April, 2012 and the assessee had deposited the same on 25th April, 2012. There is no dispute that the amount stands deposited before the filing of the return. We, therefore, find that there is no ground for taking a view different from the view consistently held by this court since AIMIL Ltd.[2009 (12) TMI 38 - DELHI HIGH COURT].
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