Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (3) TMI 954 - AT - Income TaxReversal of provision for gratuity and leave encashment - Held that:- CIT(A) has taken into consideration that the assessee had a balance of ₹ 19,67,294/- in the gratuity account as on 01.04.09. The assessee had to get the actuarial valuation done as on 31.03.10 therefore, the assessee had to make a provision for gratuity of ₹ 24,05,938 resulting in additional provision of ₹ 4,38,641/- to be made during the year to arrive at a total provision of ₹ 24,05,938/-. The Ld. CIT(A) has also considered that the assessee had the balance of ₹ 6,81,416/- in respect of provision for leave encashment as on 01.04.09 and in this way, during the year, the total provision as worked out towards leave encashment as on 31.03.10 was ₹ 3,81,466/- thereby resulting in excess provision of ₹ 2,99,950/-. The Ld. CIT(A) after considering the facts of the case had correctly find that the excess provision has been rightly added back by the assessee company to the total income in the computation of income, therefore the additions made by AO were deleted - Decided against revenue Difference between the foreman commission receivable and the foreman commission actually received - Held that:- CIT(A) has taken into consideration that the assessee earned commission of 5% on the total chit fund collection. The said commission is spread over the total period of scheme and in this way the assessee earns commission on a month to month basis on the monthly collection made and on the successful biding by the subscribers. As per the facts, the agents are paid a commission of 1% of the total chit fund value in respect of each subscriber enlisted by him provided such subscribers pays at least 4 months installment, immediately on receipt of 4 such installments and in this way there is no definite co-relation between the foremen commission earned and the agency commission paid. After appreciating the facts, the Ld. CIT(A) had rightly decided that the addition made by the AO in computing the income of the assessee by applying five times of the payment of the commission to the agents is not based on any objective yardsticks, therefore deleted the said additions.- Decided against revenue
|