2009 (7) TMI 178
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....s amounting to Rs. 15,04,407 were disallowed as follows: 1. Medical expenses-payment to unapproved hospitals 1,00,687 2. Medical reimbursement to clerical staff-Without medical bills 11,36,152 3. Reimbursement of hospitalization to clerical staff 2,67,568 --------- Total: 15,04,407 --------- --------- 4. While making this disallowance, it was observed by the AO that as per the special tax audit report under s. 142(2A), the bank is not deducting tax on reimbursement of medical reimbursement in excess of Rs. 10,000 and the same is also found to have been paid to unapproved hospitals, which amounted to Rs. 1,00,687; that the other two amounts have been reimbursed to the clerical staff which was called the unionized staff by the bank; that for the other two reimbursements there were no bills taken by the bank from the staff; that the bank had claimed that they had an agreement with the staff union that reimbursement would be made without furnishing of bills and only on the basis of declaration filed by the staff member; that the assessee had claimed this agreement before a bi-party industry-wise settlement between the banks and the unions. 5. On first appeal, the issue wa....
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....n by the employees to the effect that he has incurred those expenses; that no such declaration can take the place of a hard documentary evidence in the shape of vouchers/bills; that moreover, as correctly held by the learned CIT(A), the Industrial Dispute Act does not provide that any unjustified demand of the employees should be accepted by the employer; that in case the employees have claimed medical expenses, it is the duty of the employees to produce medical bills and other relevant documents to prove the incurrence of such expenditure; that in the absence of any vouchers regarding the expenses actually incurred, the assessee has no case at all; and that therefore, the ground raised by the assessee deserves to be rejected. 9. We have heard the parties and have perused the material on record. A copy of the memorandum of settlement between the assessee bank and The All India Co-ordination Committee of The Bank of Tokyo Ltd. Employees Association has been placed on record. Before us the claim in question is stated to be covered under this settlement. The portion of the settlement dealing with the issue at hand, for the sake of convenience, is being reproduced as under: "9. Medic....
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....sst. yr. 1996-97, contending that the learned CIT(A) has erred in directing that the write back of provision of bad debts of Rs. 1,02,49,536 was not taxable as 'business income' especially when a deduction of Rs. 12,58,26,000 had been allowed under s. 36(1)(viia) of the IT Act, 1961. 14. The reversal of NPAs or written back of provision for bad debts were found taxable in the original assessment. In the second round, the AO found that whatever provisions on account of NPA were made were offered for disallowance along with all provisions and contingencies and a separate deduction was claimed and allowed in each assessment year under s. 36(1)(viia) of the IT Act on account of provisions for bad and doubtful debts. It was found that during the year under consideration also, the assessee had made such a claim in the return of income to the extent of Rs. 3,72,21,200 and the same was allowed under s. 143(3) to the extent of Rs. 3,73,01,466; that there also, the allowance had been calculated and allowed as per the total income and provisions of s. 36(1)(viia) of the Act; that therefore, the assessee was being allowed an amount on account of provisions for bad and doubtful debts/NPA in ev....
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.... offered the said provisions for bad and doubtful debts. The amount of Rs. 623.45 lakhs written back included a contra entry of Rs. 502.09 lakhs. The actual write back of the provision for bad and doubtful debts, as such, was only of Rs. 102.49 lakhs. The AO, in the original assessment, however, included the amount of Rs. 623.45 lakhs as the assessee's income. The issue was set aside by the CIT(A). While giving effect to the CIT(A)'s order, the AO accepted the assessee's contention regarding contra entry of Rs. 502.29 lakhs. It is, however, held that the balance amount of Rs. 102.49 lakhs, being the actual write back of the provisions of bad and doubtful debts, constituted the income of the assessee for the reason that the said amount had earlier been allowed as a deduction under s. 36(1)(viia) of the Act. 18. The learned CIT(A), in our considered view, correctly held that in the absence of a specific provision in the Act, an amount of liability written back cannot be taxed as income. Huge provisions remained outstanding. No deductions under s. 36(1)(viia) of the Act had been allowed to the assessee with regard thereto, in the earlier years. The amount of Rs. 102.49 lakhs had, the....
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....provisions of s. 44C of the IT Act, 1961. 3. For that the learned C1T(A) has erred in sustaining levy of additional tax of Rs. 57,915 under s. 143(1A) of the IT Act, 1961 ignoring the reasons attached to the return." 22. The learned CIT(A) upheld the adjustments made by the AO under s. 143(1)(a) of the IT Act. It was observed that all these adjustments made, found to have been based on findings of fact and observations incorporated in the tax audit report forming part of the return filed. The learned CIT(A) found no infirmity in the adjustments made by the AO, of the total amount of Rs. 4,45,499. 23. The learned counsel for the assessee has contended that in the return of income filed, declaring income of Rs. 42,50,46,342, the assessee bank had claimed that restrictive provisions of the Act regarding allowance of expenses would not apply in view of the provisions of DTAA betweenIndiaandJapan. The AO issued intimation under s. 143(1)(a) of the Act on 20th Dec., 2004, determining the income at Rs. 42,54,91,841 making the following adjustments: Rs. Gifts [as per para 4(iv) of Tax Audit Report ('TAR')] 23,617 Travelling expenses [as per para 4 (vi) of TAR] 63,423 Guest-house e....