TMI Blog2012 (8) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... erable receivables, without considering their nature and explanation of the appellant. 2. On the facts and circumstances of the case as well as in Law, the Ld. CIT(A) has erred in confirming the action of AO in disallowing a sum of ₹ 2,97,034/- u/s. 361)(va) of the I.T. Act, 1961 being the alleged late payment of the employees contribution of the Provident Fund. 3. On the facts and circumstances of the case as well as in Law, the Ld. CIT(A) has erred in confirming the action of AO in making an addition of ₹ 2,33,864/- on account of prior period expenses without appreciating the fact and circumstances of the case. 2. Briefly stated the facts of the case are that assessee is engaged in the business of manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3/- M/s. Maxima Corporation ₹ 1,37,982/- 4. However, only M/s. Maxima Corpn., have confirmed the amount of ₹ 1,37,982/-. In respect of other two parties, though the notices were served, but there was no response. The AO asked the assessee to file confirmations from these two parties. According to the AO, the assessee failed to comply with the requirements. It was the contention of the assessee that these amounts are unrecoverable and have been certified by the management and as these payments are made exclusively for business purpose, the write off of the same should be allowed. The AO was of the opinion that the assessee could not prove the write off by brining any evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon by the assessee relates to the payments made to employer s contribution of provident fund whereas in the instant case, it is delayed payment of employee s contribution to Provident fund which has been deposited by the assessee after the due date of payments as per the PF Act and went on to add ₹ 2,97,034/- to the returned income. 6. During the course of the proceedings, the AO further observed that as per Annexure 10A to the Audit report, the assessee has debited prior period expenses amounting to ₹ 2,33,864/-. As these expenses pertain to earlier year, the AO sought explanation from the assessee as to why these expenses should not be disallowed. As no explanation/submission came from the side of the assessee, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors/creditors loans and advances. Accordingly, the amounts outstanding for more than three years which are considered by the management either as not recoverable or not payable have been written off within the year. The Ld. Counsel further argued that the detailed chart has been filed before the lower authorities giving complete details of the debit balances written off during the year. The Ld. Counsel also pointed out that these debit balances are either advances given for the purchase of raw materials or advances given to employees who have left the employment of the appellant. The Ld. Counsel relied upon the decision of the Mumbai Tribunal in ITA No. 3971/M/09 in the case of DCIT Circle 3(1) Vs M/s. Edelweiss Capital Ltd., Mumbai and cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lower stage. We therefore restore this issue back to the file of AO. The assessee is directed to bring cogent material on record to establish that the advances were given in the ordinary course of business, clearly identifying the nature of such advances and the purpose for which they are given, to establish it as a business loss allowable u/s 28{i} / 37 [1 ] of the Income Tax Act . The AO is directed to verify the claim of the assessee after giving reasonable opportunity of being heard to the assessee. This ground of the assessee is allowed for statistical purposes. 11. Ground No. 2 relates to disallowance of sum of ₹ 2,97,034/- being alleged late payment of employee s contribution to the Provident fund. The facts giving rise to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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