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TMI Blog2020 (6) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the addition of Rs. 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 Rs. 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 Rs. 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 Rs. 2,57,213/- as the assessee could not prove during the course of assessment the necessity of these expenses with regard to his business. 6. That on the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue 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 decision of the Supreme Court in the case of Commissioner of Income Tax vs. Alom Extrusion Ltd., reported in 2009 Vol.390 ITR 306, held that the deletion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the meaning of section 36(1)(va) read with section 2(24)(x) of the Act. Consequently, the addition of Rs. 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 case of Commissioner of Income Tax vs. Alom Extrusion Ltd., reported in 2009 Vol.390 ITR 306. Therefore, employee's contribution deposited beyond the due dates spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported 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 Rs. 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 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. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Rs. 4,93,785/- which has disallowed for non-deduction of TDS, it appears that it had double addition as the A.O. has already been disallowed this amount which was not contested by the appellant during appeal. In this regard, reference may be made to the decision of the Jurisdictional ITAT in the case of in the case of Rani Ghosh Vs. DCIT, I.T.A. No. 1420 /KOL/ 2015 has held- "i) in the context of Section 194C(1), person undertaking to do the work is the Contractor and the person so engaging the contractor is the contractee; ii) that by virtue of the Amendment introduced by Finance Act (No.2) 2009, the distinction between a contractor and a sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ached 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 Rs. 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 which the TDS deductors have made TDS: Deductor's Name Amount of Receipt/Income(RS.) Amount of TDS(Rs.) Keventer Agro Limited-194C 28,73,795/- 57,481/- State Bank of India, Kolkata-194A 23,09,303/- 2,30,941/- G.M. Pens International Private Limited-194A 60,000/- 6,001/- The Hind Matches Private Limited 25,000/- 2,500/- Heinz India Private Limited-194C 27,83,257/- 55,666/- Heinz India Private Limited-194H 25,53,154/- 2,55,319/- Out of the above, the income on account of interest from State Bank of India and G.M Pens International Pvt. Ltd. as well as income on account of commission from Heinz India Pvt. Ltd. were fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om Keventer Agro Ltd and a sum of Rs. 28,09,952/- relate to reimbursement of income which is reflected in ledger account. AS discussed all the entries are reflected in books of accounts which has been examined. The appellant had shown total income from C & F Agency amounting to Rs. 52,30,474/- in his return. The A.O. has treated the reimbursement expenditure as income due to the facts that TDS was deducted. These reimbursements under no stretch of imagination can be considered to be income at the hands of the appellant. The deduction of TDS on expenditure reimbursed would not change the nature of these payments. There are number of judicial decisions which have held the reimbursement of expenditure does not constitute income assessable to tax. The decisions are as follows: (i) CIT vs Dunlop Rubber Company Ltd (1983) 142 ITR 493 (Cal) (ii) CIT vs Expeditors International (India) (P) Ltd (2012) 24 Taxmann.com 76 (Del) After careful consideration of the submission of the appellant, perusal of the relevant assessment records and the decisions of the Hon'ble High Court, the addition of Rs. 56,57,052/- is therefore deleted." 23. Aggrieved by the order of the ld. CIT(A) the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s foregoing including the binding decisions of the jurisdictional High Court, and ITAT, the assessment records and the submission of the appellant, addition on account of donation and subscription is deleted. The Assessing Officer is directed accordingly." 29. Aggrieved the order of the ld. CIT(A) the revenue is in appeal before us. 30. 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 theld CIT(A). 31. 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 Puja and subscription expenses are incidental to the assessee`s business therefore should be allowed 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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