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2014 (12) TMI 1217 - AT - Income TaxDisallowance of amortization expenditure on purchase of ' Govt. Securities and paid as premium - Held that:- The assessee is entitled to the claim of deduction on account of amortization of premium paid on Government securities held in HTM category. See Commissioner of Income Tax-2, Mumbai Versus HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT ] - Decided in favour of assessee Disallowance being donation and subscription - Held that:- We find no merit in the claim of the assessee, where only a provision for donation and subscription to the extent of ₹ 5,00,000/- had been made in the books of account and no actual expenditure has been incurred by the assessee. Merely because the Board of the a- Bank had passed a resolution for incurring the said expenditure, does not entitle the assessee to the said claim in the absence of having incurred any expenditure on donation and subscription - Decided against assessee Disallowance on account of staff voluntary payment - Held that:- Where the assessee in recognition of the services provided to its retiring employees make certain ex-gratia payments in recognition of their services, which are not based on any scheme or instruction formulated by the employer assessee, then the same partakes the nature of profit in lieu of salary. The relationship between the assessee and retiring employees was admittedly as of employer and employee and the remuneration paid to such employees is part of the salary due to the said employee. Even the ex-gratia payment made by the assessee over and above the remuneration due to the employees partakes the character of profits in lieu of salary to such employee and is duly allowable as an expenditure in the hands of the assessee under section 37(1) of the Act. We find no merit in the stand of the CIT(A) that such expenditure is capital in nature. Reversing the order of the CIT(A), we direct the Assessing Officer to allow the expenditure - Decided in favour of assessee Disallowance invoking the provisions of section 40(a)(ia) - Non TDS on expenditure on study tour programme of directors - Held that:- First step to be taken into consideration is whether the expenditure incurred by the assessee is relatable to the business carried on by the assessee and after verifying the nature of the expenditure, the second step is whether the said expenditure is subject to deduction of tax at source. Merely because the assessee on its own motion had deducted tax at source, though in succeeding year, does not warrant the disallowance of said expenditure in the captioned assessment year. After going through the details furnished by the assessee, we are of the view that the plea of the assessee in this regard needs to be looked into i.e., the Assessing Officer should first examine the nature of the expenditure and its allowability i.e., being incurred for the purpose of carrying of the business and thereafter adjudicate whether the same should be subject to tax deduction at source. In view thereof, we set aside this issue back to the file of the Assessing Officer to re-adjudicate the same - Decided in favour of assessee for statistical purposes. Disallowance of directors and staff for training programme - Held that:- Where the expenditure has not been identified then the provision made for directors and staff training programme, even in cases where the assessee was following mercantile system of accounting, the same being unascertained liability, is not allowable under section 37(1). - Decided against assessee Addition made on account of unpaid amount out of provisions - CIT(A) delted the addition - Held that:- D.R. has failed to controvert the finding of the CIT(A) except for stating that the provision made cannot be allowed as deduction. We find no merit in the plea of the Revenue in this regard and uphold the order of the CIT(A) - Decided against revenue
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