TMI Blog2018 (12) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure but expressed his views that the assessee has changed the nomenclature of the expenses to incentives. CIT(A) has allowed the assessee’s appeal. Therefore, we do not find any infirmity in the order of CIT(A) and hence, upholding the same, we dismiss the grounds raised by the revenue on this issue. Disallowance towards ESIC and PF contributions - AO observed that since the assessee failed to substantiate its claim before him, made disallowance u/s 36(v)(a) for non payment of ESIC and PF before the due date - Held that:- It is a settled position of law that though the assessee paid the contributions towards ESIC and PF beyond the due date, but, before filing of the return of income, no disallowance can be made in this regard. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the P L A/c towards sales discount and commission under the head selling and distribution expenses. ii. Requirement of disallowance of expenditure of ₹ 49,722/- debited to the P L A/c towards interest on TDS. iii. Requirement of disallowance u/s 36(1)(v)(a) for the delay in remittance of PF amount. 2.1 Accordingly, the AO passed the assessment order u/s 143(3) rws 263 determining the total income at ₹ 2,41,25,282/- by making the following disallowances: 1. Disallowance of ₹ 1,51,55,998/- towards incentives and commission paid to employees. 2. Disallowance of ₹ 6,45,331/- towards ESIC and PF contributions. 3. When the assessee preferred an appeal before the CIT(A), the CIT(A) deleted the aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notification governing such funds. (vi) The Ld.CIT(A), while allowing the claim of the assessee in case of belated employees contribution over looked the clarification issued by the CBDT vide Circluar No 22/2015 dtd: 17-12-2015 that the provisions of sec 43B are attracted only in case of employer's contribution towards ESI PF and not to contribution of employees to ESI PF. (vii) The appellant craves leave to add, delete, substitute and amend any ground of appeal before and/ or at the time of hearing of the appeal. For these and other grounds that may be urged before/at the time of hearing of the appeal, it is prayed that the addition of ₹ 1,38,29,928/- made on account of disallowance of commission and addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission and discounts do not come under the purview of the commission u/s 194H by any stretch of imagination and they are all sales incentives paid to employees and hence, TDS provisions will not apply to such sales incentives u/s 194H of the Act. 7. Since the evidence submitted before the CIT(A) was not submitted before the AO, the CIT(A) called for a remand report from AO regarding the additional evidences of statement of affidavits in respect of the employees for the FY 2008-09 and statement of incentives paid to employees for the FY 2008-09. 8. After considering the submissions of the assessee as well as remand report from the AO, the CIT(A) deleted the disallowance of ₹ 1,51,55,998/- made by the AO by observing as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hreshold limits. Ld. CIT(A) has called for remand report from AO and AO has not disputed the actual expenditure but expressed his views that the assessee has changed the nomenclature of the expenses to incentives. After considering the relevant papers submitted before him and remand report, ld. CIT(A) has allowed the assessee s appeal. Therefore, we do not find any infirmity in the order of CIT(A) and hence, upholding the same, we dismiss the grounds raised by the revenue on this issue. 10. With regard to ground Nos. (iv) to (vii) relating to disallowance towards ESIC and PF contributions, the AO observed that since the assessee failed to substantiate its claim before him, made disallowance u/s 36(v)(a) of ₹ 6,45,331/- for non paym ..... X X X X Extracts X X X X X X X X Extracts X X X X
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