TMI Blog2009 (7) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowed 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 furnishin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be supported by hard evidence; that in the present case, the assessee did not have any vouchers with regard to the medical expenditure incurred by its employees; that the assessee has unsuccessfully tried to raise a declaration given 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 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... memorandum of settlement between the assessee bank and the association of its employees. 12. In the result, for statistical purposes, the appeal is partly allowed, as indicated. ITA No. 597A/Cal/2002: 13. This is Department's appeal for asst. 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; t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It has also written back an amount of Rs. 623.45 lakhs in the P L a/c, from the aggregate credit balance of the assessee lying in the scud account. While computing the income chargeable as profits and gains from business or profession, the assessee had 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that as per the said art. 7(3) of the DTAA between India and Japan, all expenses claimed by the appellant irrespective of disallowable clauses of the IT Act, 1961, are allowable except the head office administrative expenses, which is only to be allowed as per 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 un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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