TMI Blog2020 (6) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... count.CIT(A) relied on the judgment of the Apex Court in the case of TRF Ltd vs CIT [ 2010 (2) TMI 211 - SUPREME COURT] wherein as held After 1st April, 1989, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. Addition u/s 194C(7) read with section 40a(ia) - HELD THAT:- Through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials available on record. We have gone through the order of ld CIT(A) and noted that ld CIT(A) has reached on a logical conclusion, hence we note that there is no infirmity in the order of the ld. CIT(A). That being so, we decline to interfere in the order passed by the ld. CIT(A), his order on this issue, is hereby upheld and the ground no. 3 raised by the revenue is dismissed. Addition which pertains to reimbursement of expenses - HELD THAT:- A.O. has treated the reimbursement expenditure as income due to the facts that TDS was deducted. These reimbursem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the Ld. CIT (A) was not justified and grossly erred in deleting the addition of ₹ 12,72,983/- as the Ld. CIT(A) failed to appreciate the proviso (i) of Section 36(2) of the Act as laid down by Board s Circular No. 12/2016 dated 30.05.2016. 3. That on the facts and circumstances of the case, the Ld. CIT (A) was not justified and grossly erred in deleting the addition to the tune of ₹ 6,37,75,651/- as the assessee failed to comply with the provision of section 194C(7) thereby attracting the provision of section 40(a)(ia) of the Act. 4. That on the facts and circumstances of the case, the Ld. CIT (A) was not justified and grossly erred in deleting the addition of ₹ 56,57,052/- as during the course of assessment the assessee failed to furnish necessary documents/explanation regarding the nature and necessity of expenses that has been incurred by it on behalf of its agency in respect of which the reimbursement is made. 5. That on the facts and circumstances of the case, the Ld. CIT (A) was not justified and grossly erred in deleting the addition of ₹ 2,57,213/- as the assessee could not prove during the course of assessment the necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eavage of judicial opinion, on the taxation of employee s contribution, deposited beyond the due dates specified under the PF laws, but before the due date of filing income-tax return. In Commissioner of Income Tax-II vs Gujarat State Road Transport Corporation [2014] reported in 41taxmann.com 100, the Hon ble Gujarat High Court has held that if employee s contribution received by the assessee is not credited to the employee s account in the relevant fund on or before the due date mentioned in the Explanation to section 36(1)(va) [i.e., the due dates under PF Act, ESI Act/other law], the assessee shall not be entitled to deduction of such amount in computing the income referred to in section 28 of the Act even if contributions deposited on or before due date specified under section, the Calcutta High Court had in thecase of CTT Vs M/s Vijay Shree Limited (supra) held The only issue involved in this appeal is as to whether the deletion of the addition by Assessing Officer on account of Employees Contribution to ESI and PF by invoking the provision of Section 36(1 )(va) read with Section 2(24)(x) ofthe Act was correct or not. It appears that the Tribunal below, in view of the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut before the due date of filing income-tax return as specified in section 43B of the Act, cannot be treated as the deemed income of the appellant within the meaning of section 36(1)(va) read with section 2(24)(x) of the Act. Consequently, the addition of ₹ 19,85,240/- made by the Assessing Officer is to be deleted. The Assessing Officer is directed accordingly. This ground of appeal succeeds and is, therefore, allowed. 6. Aggrieved by the order of the ld. CIT(A), the revenue is in appeal before us. 7. The ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and the same is not being repeated for the sake of brevity and on the other hand the ld. Counsel for the assessee has relied on the order of theld CIT(A). 8. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials available on record. We note that this issue is squarely covered by the decision of the Supreme Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved that the appellant company has debited written off an amount of ₹ 12,72,983/- on account of bad debts in their audited P L a/c. As held by the Apex Court in the case of TRF Ltd vs CIT reported in (2010) 323 ITR 397 (SC) This position in law is well- settled. After 1st April, 1989, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. Therefore, as the appellant company has written off the bad debts in its account, the disallowance of ₹ 12,72,983/- on account of bad debts is deleted. This ground of appeal succeeds and is therefore allowed. The A.O. is directed accordingly. 12. Aggrieved by the order of the ld. CIT(A) the revenue is in appeal before us. 13. The ld. DR has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and the same is not being repeated for the sake of brevity and on the other hand, the ld. Counsel for the assessee has relied on the order of ld CIT(A). 14. We have heard both the parties and carefully gone through the submission put fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has failed to deduct tax on expenses amounting to ₹ 6,37,75,651/- and thus the condition for allowance of such expense as laid down in section 40a(ia) was not satisfied. Therefore, expenses of ₹ 6,37,75,651/- were disallowed in terms of provisions of Sec. 40a(ia) of the Act. 17. Aggrieved by the order of the Assessing Officer the assessee carried the matter in appeal before the ld. CIT(A) who has deleted the addition made by the Assessing Officer observing the followings: I have considered the submission of the appellant and perused the relevant assessment records. The A/R of the appellant during appellate proceeding has stated that no TDS was deducted on the freight payments as PAN cards were obtained from the transporters in respect of these payments. On verification from the invoice issued by the transporter it was found that in most cases, the PAN was mentioned. In other cases, the PAN of the transporters had been obtained. As regards the other payments, it appears that no TDS is to be deducted as they have not crossed the threshold limit. As regards interest charges to Tata Capital amounting to ₹ 4,93,785/- which has disallowed for non-deduction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and the same is not being repeated for the sake of brevity and on the other hand, the ld. Counsel for the assessee has relied on the order of theld CIT(A). 19. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials available on record. We have gone through the order of ld CIT(A) and noted that ld CIT(A) has reached on a logical conclusion, hence we note that there is no infirmity in the order of the ld. CIT(A). That being so, we decline to interfere in the order passed by the ld. CIT(A), his order on this issue, is hereby upheld and the ground no. 3 raised by the revenue is dismissed. 20. Ground no. 4 raised by the revenue relates to addition of ₹ 56,57,052/- which pertains to reimbursement of expenses. 21. Brief facts qua the issue are that as per Form no. 26AS, the assessee has been in receipt of the following sums during the F.Y. 2012-13 from whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payments amounting to ₹ 66,66,117/- from Heinz India as against ₹ 53,36,441/- reflected in Form 26AS. Therefore, the receipts from Heinz India is much more than that reflected in Form 26AS and this fact was not appreciated by the A.O. Out of the above amount, the appellant has reflected ₹ 28,09,952/- as income from C F Agency received from Heinz India. The reimbursement of expenditure by Heinz India for expenditure incurred by the appellant on behalf of Heinz India amounts to ₹ 25,26,459/-. The balance amount is on account of Service Tax payable. Therefore, as regards the account of Heinz India, there is no discrepancy as regard payments received. As regards, Keventer Agro Ltd, the total payment received amounts to ₹ 51,50,068/- as against ₹ 28,73,795/- reflected in 26AS. Therefore,similarly as in the case of Heinz India, the payments received were much more than reflected in Form 26AS. Out of the above amount, a sum of ₹ 23,40,116/- has been reflected in the books as income from C F Agency received from Keventer Agro Ltd and a sum of ₹ 28,09,952/- relate to reimbursement of income which is reflected in ledger account. AS di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se related to Puja souvenirs 47,100/- Puja Expense 68,374/- Subscription Donation 1,41,739/- TOTAL 2,57,213/- 28. Aggrieved by the order of the Assessing Officer the assessee carried the matter in appeal before the ld. CIT(A) who has deleted the addition made by the Assessing Officer observing the followings: I have considered the submission of the appellant and perused the relevant assessment records. The Calcutta High Court in the case of CIT vs. Bata India Ltd. 201 ITR 884 has held it is notorious fact that, in the festival months, the shops in this part of the country have to pay contributions towards community celebrations to keep the youths in the neighbourhood of the shop happy to ensure smooth conduct of the business. The expenditure can be said to be an expenditure required to maintain the business. Following decision of the Calcutta High Court, the jurisdictional Tribunal in the case of Das Majumder Construction vs. ITO in ITA No. 1441/Kol/2009 and ITO vs. Asit Mukherjee in ITA No. 2209/Kol/2010 have held and allowed suc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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