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2019 (11) TMI 858 - AT - Income TaxDisallowance of expenditure claim on consultancy - Non-deduction of TDS - HELD THAT:- The fact remains that this taxpayer has not tendered any details of the actual nature of expenditure. We therefore find no reason to disagree with the lower authorities’ conclusion quoting assessee’s failure in filing the relevant details. Coupled with this, the fact also remains that the legislature has itself amended Section 40(a)(ia) vide the Finance Act, 2014 w.e.f. 01.04.2015 restricting a disallowance made u/s 40(a)(ia) from 100% to 30% only. This tribunal’s order in DIPAK PARUI VERSUS J.C.I.T., RANGE-53, KOLKATA [2018 (7) TMI 2066 - ITAT KOLKATA] holds the above proviso inserted in the Act to be a curative one having retrospective effect. We therefore, direct the Assessing Officer to restrict the impugned disallowance to the extent of 30% only. Necessary computation to follow. This first substantive ground is taken as partly accepted in foregoing terms. Section 69A unexplained money addition - HELD THAT:- Dispute between the parties is that of reconciliation of assessee’s closing & opening cash in hand as per Schedule-7 of its balance sheet as on 31.03.2007 and 01.04.2008 with corresponding sums of ₹ 59,08,962/- and 1,07,14,466/-; respectively. The assessee has further pleaded that there is a lack of reconciliation in accounts pertaining to 4 lakh consumers and 9 circles with 21 divisions. This assessee is a public sector power utility company wherein the main source of cash in hand is that of consumer payments by way of power charges only. We therefore deem it appropriate that larger interest of justice will be met in case the Assessing Officer re-examines the entire issue afresh as per law within three effective opportunities of hearing. The assessee shall place on record all necessary particulars within the very number of opportunities. Bad debt disallowance - HELD THAT:- There is no dispute between the parties about allowability of a bad debts claim under the provisions of the Act per se since the issue herein is that of factual aspects only. The Assessing Officer as well as the CIT(A) hold that the assessee had not placed on record the relevant details of the beneficiaries/consumers covered under the power dues waiver schemes as well as about non-production of the Board’s resolution to this effect. The assessee’s case on the other hand is that it had no other source except that of providing power services to the consumers in whose cases it had written off all the outstanding dues in case of lakhs of consumers. We therefore deem it appropriate that the instant factual issue also requires necessary verification at least on test check basis. The Assessing Officer is directed to examine the same afresh within three effective opportunities of hearing as per law. Leave encashment disallowance for lack of actual payment u/s 43B(f) - HELD THAT:- Hon’ble Calcutta high court has admittedly quashed the foregoing statutory provision itself in Exide Industries Ltd. vs. U.O.I. [2007 (6) TMI 175 - CALCUTTA HIGH COURT] . Hon’ble Apex Court admitted the Revenue’s SLP [2009 (5) TMI 894 - SC ORDER] and stayed operation of above high court’s judgement. The said case is stated to be pending till date. We therefore restore this issue back to the Assessing Officer to decide afresh as per their lordships’ final call on the issue. This second substantive ground is taken as accepted for statistical purposes. Consultancy fee, security service charges and donation disallowances made to the Administrative Staff College of India payments - HELD THAT:- Lower authorities hold that the assessee had not deducted TDS on the former two payments. Mr. Goenka’s only plea during the course of hearing is that the assessee had deducted TDS involving the former two claims as on 04.04.2008 and 12.05.2008 i.e. in next financial year 2008-09 respectively. We therefore deem it appropriate to restore the issue back to the Assessing Officer for fresh necessary factual verification as per law. Administrative Staff College of India donation - HELD THAT:- There is no denial of the fact about the assessee having not claimed the impugned expenditure in the said earlier assessment years. The very claim is being denied in the year of payment as well. Hon’ble Gujarat High Court’s judgement in PCIT vs. Adani Enterprise Limited [2016 (7) TMI 1250 - GUJARAT HIGH COURT] holds that such an expenditure claim is a revenue neutral instance in case the assessee concerned is assessed at the same rate both in the years of accrual and in the year of payment. We therefore decline the Revenue’s foregoing technical argument. Mr. Goenka at this stage submitted that the assessee’s payee also enjoys Section 197(1) exemption as per ADIT(Exemp)-2, Hyderabad’s order dated 21.04.2005 and the relevant certificate to this effect which was placed before the CIT(A) could not be factually verified. We therefore deem it appropriate to send the instant issue back to the Assessing Officer for afresh factual verification as per law within three effective opportunities of hearing. Allowability of the alleged penalty amount imposed under the Tripura Value Added Tax Act, 2004 read with the Tripura Value Added Tax Rules, 2005 - Both the lower authorities hold the same to be not allowable being to a penalty imposed for non-compliance of a fiscal statute as per Section 37(1) of the Act that the same is opposed to public policy - HELD THAT:- We find from the perusal of the CIT(A)’s detailed discussion in page 33 para 26.4 that the said issue of correctness of TVAT is yet to attain finality since the taxpayers revision petition is stated to be pending. Nor there is adjudication either in assessment order or the CIT(A)’s order as to whether the amount in question represents a penalty per se or it is a mere penal action for nomenclature purposes. We therefore restore the instant issue back to the Assessing Officer for afresh adjudication as per law after taking into consideration all these factual and legal aspects. Appeal allowed for statistical purposes.
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