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2022 (5) TMI 40 - ITAT MUMBAIAddition u/s 68 - untraceable credits in bank - HELD THAT:- We find that assessee has shown untraceable credit entries in the bank account as a separate item. Such is the amount shown under the head Sundry debtors (others) having the credit items. Before us, it is shown that the entry dated 30 September 2016 is a TDS receivable for Assessment Year 2015-16 which has been taxed under section 68 of the Act by the learned Assessing Officer. ] Looking at the details placed we find that the same entry relates to TDS credit receivable for Assessment Year 2015-16 amounting to ₹40,157/-. In view of the above facts, we find that the same amount cannot be added under section 68 of the Act. However, as same amount is related to credit received in the bank account, we direct the learned Assessing Officer to verify that whether any interest component is involved in it or not. If there is any interest component, it may be taxed; the balance amount is not chargeable to tax. Accordingly, we direct the Assessing Officer to delete the addition and only tax interest component, if any. In the result, the ground no.1 of the appeal is allowed. Disallowance under section 37(1) in respect of delayed payment of service tax, provident fund, and VAT - HELD THAT:- We find that identical issue has been decided by the co-ordinate Bench in case of Emdee Digitronics Pvt. Ltd [2019 (7) TMI 86 - ITAT KOLKATA] held that interest expense on late deposit of VAT, service tax, TDS etc are allowable expenditure under section 37(1) of the Act. In view of the above fact, respectfully following the decision of Kolkata Bench of ITAT, we hold that such expenses are not disallowable under section 37(1) of the Act. Further, VAT laws, provident laws and service tax laws clearly provide for payment of interest if there is a delay in payment of fees. Therefore, it is apparent that those respective laws allowed the belated payment along with interest. Therefore, those are not affected by explanation–1 to section 37(1) of the Act. Disallowance of provision made in respect of purchase of TDRs - For this year, assessee has claimed a provision on the basis of percentage of area sold - HELD THAT:- It is apparent that the cost of the TDR is ascertained and liability related to the area sold by the assessee required to be provided, when income offered for taxation. Further, the assessee is claiming deduction since 2009-10 and has already been allowed deduction on the same methodology up to 31st March 2015. We do not find any reason to disturb it. Even otherwise, in percentage completion method the Revenue is recognized based on percentage of work completed and therefore all probable expenditure up to that percentage level are to be recognized as expenditure. In view of this, we reverse orders of the lower authorities and direct learned Assessing Officer to delete the disallowance on account of TDR. Thus, ground no. 3 of the appeal is allowed.
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