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M/s. Trinity Auto Components Ltd. Versus The Dy. Commissioner of Income Tax, Circle – 7, Pune

2016 (2) TMI 828 - ITAT PUNE

Disallowance on account of the alleged late payment of PF and ESIC dues - Held that:- The perusal of the details of employees PF reflect that for the month of January, 2008, sum of ₹ 2,18,226/- was due to be paid by 20.02.2008, but the same was deposited on 27.02.2008. Further, the said contribution to Employees’ PF for March, 2008 amounting to ₹ 1,96,794/- was due to be deposited by 20.04.2008, but was deposited by 29.04.2008, hence, the delay in making the aforesaid contribution is .....

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the assessee is entitled to the claim of deduction of ₹ 4,15,020/- i.e. the contribution to the Employees’ PF and ESCI, which has been deposited before the due date of filing the return of income - Decided in favour of assessee

Disallowance of Bad debts u/s 2(24) (x) read with Section 36(va) - Held that:- The Hon’ble Supreme Court in TRF Ltd. Vs. CIT (2010 (2) TMI 211 - SUPREME COURT ) has laid down the proposition that where the assessee is of the view that the debt had become .....

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itten off. We find no merit in the observations of the authorities below in this regard. The year under appeal before us is assessment year 2008-09, the assessee has written off the sundry balances which were outstanding since financial year 2000-01, totaling ₹ 12,30,042/- and further outstanding since 2001-02 and 2002-03 amounting to ₹ 2,49,578/- and ₹ 1,15,923/- respectively. The claim of the assessee before the authorities below was that amounts could not be recovered from t .....

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t:- The assessee before us is a limited company and had booked expenditure of ₹ 11,24,461/- on account of vehicle expenses, in addition to the expenditure booked on account of travelling and conveyance expenditure. The Assessing Officer had disallowed 20% out of total expenditure under travelling, conveyance and vehicle totaling ₹ 20,38,691/- resulting in an addition of ₹ 4,07,738/-. However, the CIT(A) allowed the claim of the assessee in respect of travelling and conveyance e .....

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e expenses and out of such business expenses on which FBT tax had been paid, no disallowance for personal use can be warranted. Accordingly, we allow the claim of the assessee. - Decided in favour of assessee - ITA No.727/PN/2014 - Dated:- 20-1-2016 - MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM For The Appellant : Shri Harshkumar S. Sharma For The Respondent : Shri Mazhar Akram ORDER PER SUSHMA CHOWLA, JM: This appeal filed by the assessee is against the order of CIT(A)-III, Pune, date .....

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rred in law as well as in facts in disallowing a sum of ₹ 15,95,544.00 (Rs. Fifteen Lacs Ninety Five Thousand Five Hundred Forty Four Only) for Bad Debts U/s.36(1)(vii) in view of the facts & circumstances of the case no such disallowance was at all called for, without prejudice and in any case the disallowance is not as per law. 3) For that the Learned Commissioner of Income-tax (Appeals) erred in law as well as in facts in disallowing a sum of ₹ 1,12,400.00 (One Lac Twelve Thou .....

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allowance of ₹ 23,45,071.00 (Rs. Twenty Three Lacs Forty Five Thousand Seventy One Only) made be deleted. 6) That the appellant craves for further Grounds of Appeal to be submitted at the time of hearing, given an opportunity of being heard and leave to add, alter and modify any ground of appeal at or before the hearing of the appeal. 3. The issue raised in ground of appeal No.1 by the assessee is against the disallowance of ₹ 4,15,020/- on account of the alleged late payment of PF a .....

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said amounts after due date, though before the due date of filing the return of income. 5. The CIT(A) allowed the claim of the assessee for the month of September, 2007 amounting to ₹ 2,08,339/- as the payment was made within grace period of five days. However, the balance payment on account of employees PF and ESCI payments being made beyond the grace period of five days, were disallowed by the CIT(A) to the extent of ₹ 4,15,020/-. 6. The assessee is in appeal against the order of .....

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s of employees PF reflect that for the month of January, 2008, sum of ₹ 2,18,226/- was due to be paid by 20.02.2008, but the same was deposited on 27.02.2008. Further, the said contribution to Employees PF for March, 2008 amounting to ₹ 1,96,794/- was due to be deposited by 20.04.2008, but was deposited by 29.04.2008, hence, the delay in making the aforesaid contribution is period of 7 and 9 days, respectively. In respect of Employees ESIC contribution for the month of December, 2007 .....

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the Employees PF and ESCI, which has been deposited before the due date of filing the return of income. Accordingly, we delete the addition of ₹ 4,15,020/-. The ground of appeal No.1 raised by the assessee is thus, allowed. 10. The issue in ground of appeal No.2 raised by the assessee is against the disallowance of ₹ 15,95,544/-, which was claimed as bad debts under section 36(1)(vii) of the Act. 11. The perusal of the assessment order reflects that the Assessing Officer had noted th .....

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2002-03. ₹ 1,15,924/-. The claim of the assessee before the Assessing Officer was that the said debit balances of the respective suppliers could not be recovered inspite of several efforts, hence, the same were written off. The Assessing Officer observed that though the assessee had furnished relevant details, but it could not furnish any explanation regarding the need for writing of the debts in the current year. The Assessing Officer placed reliance on the ratio laid down by the Hon ble .....

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refused or expressed desire not to pay. The CIT(A) referring to the decision of Hon ble Supreme Court in TRF Ltd. Vs. CIT reported in 190 taxmann 391 (SC), observed that the Hon ble Supreme Court in the said case had held that it is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. The CIT(A) was of the view that it was only the bad debt which could be written off as irrecoverable in the books of account and not any debt. He noted that though after the amend .....

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t infact had become irrecoverable, it was enough if the bad debt was written off as irrecoverable in the books of account. 15. The learned Departmental Representative for the Revenue on the other hand, placed reliance on the order of CIT(A). 16. We have heard the rival contentions and perused the record. The assessee vide the present ground of appeal has challenged the addition made on account of disallowance of deduction claimed under section 36(1)(vii) of the Act amounting to ₹ 15,95,544 .....

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e bad debt is written off as irrecoverable in the accounts of the assessee. Undoubtedly, it is the bad debt written off, which are allowed as deduction under section 36(1)(vii) of the Act. The Assessing Officer had disallowed the claim of the assessee on the ground that the onus was upon the assessee to prove that the debts can no longer be collected and need to be written off. The CIT(A) was also of the view that only the debts which had become bad had to be written off. We find no merit in the .....

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eral efforts. Where the assessee has not been able to recover the amounts for such long period, the said debt has become bad in the hands of assessee and the same was written off in the books of account. Such writing off of bad debt is duly allowable as deduction in the hands of the assessee. Accordingly, we direct the Assessing Officer to delete the addition of ₹ 15,95,544/-. The ground of appeal No.2 raised by the assessee is thus, allowed. 17. The issue in ground of appeal No.3 raised b .....

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did not furnish any explanation regarding the increase in expenses. The Assessing Officer further held that the personal element in the said expenditure could not be ruled out and hence, 20% of the said expenditure was disallowed at ₹ 4,07,738/-. 19. The CIT(A) restricted the disallowance to 10% of the total expenditure. The plea of the assessee was that it had paid fringe benefits on conveyance, tours and travels and running and maintenance of motor car and therefore, no personal element .....

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be concluded that the expenditure was incurred for the purpose of business irrespective of the contention of the assessee that such expenditure was subjected to FBT. Accordingly, 10% of the said expenditure was disallowed in the hands of the assessee amounting to ₹ 1,12,400/-. 20. The assessee is in appeal against the order of CIT(A) and pointed out that there is no merit in the aforesaid disallowance in the hands of assessee company. 21. The learned Departmental Representative for the Re .....

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