TMI Blog2021 (4) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of Employee s Provident Fund (EPD) and Employee s State Insurance Scheme (ESI) as deemed income of the employer under Section 2(24)(x) of the Act. It is settled law that when two judgments are available giving different views then the judgment which is in favour of the assessee shall apply as held in case of Vegetable Products Ltd[ 1973 (1) TMI 1 - SUPREME COURT] by the Hon ble Supreme Court. Hence, in light of the latest decision in case of Pro Interactive Service (India) Pvt. Ltd., the issue is covered in favour of the assessee. Allowability of sales promotion expenses and Diwali Expenses - allowable business expenses or not? - HELD THAT:- The assessee has given details as to how these expenses are related to the business expenses. The CIT(A) has given a detailed finding to that effect.There is no need to interfere with the findings of the CIT(A). Hence, Ground No. 2 is dismissed. Addition on account of expenditure incurred on Corporate Social Responsibility - HELD THAT:- As in case of National Seeds Corporation Ltd. Vs. Additional CIT[ 2018 (4) TMI 335 - ITAT DELHI] it has been categorically held that the Explanation (2) of Section 37(1) was inserted w.e.f. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case in deleting the addition of ₹ 34,30,151/- made by AO on account of late deposit of ESIC PF. 2. Ld. CIT(A) erred in law and on facts of the facts of the case in deleting the addition of ₹ 11,75,214/- made by AO on account of sales promotion festival expenses. 3. Ld. CIT(A) erred in law and on facts of the facts of the case in deleting the addition of ₹ 87,82,889/- made by AO on account of expenditure incurred on Corporate Social Responsibility. 4. Ld. CIT(A) erred in law and on facts of the facts of the case in deleting the addition of ₹ 16,83,921/- made by AO u/s 14A of the Income Tax Act, 1961 read with rule 8D of the Income Tax Rules 1962. 5. Ld. CIT(A) erred in law and on facts of the facts of the case in admitting additional ground regarding allowability of provisions of carbon credits. 6. Ld. CIT(A) erred in law and on facts of the facts of the case in allowing the appellant relief of ₹ 2,68,40,816/- on account of provisions of carbon credits 3. The assessee company is engaged in the business of manufacturing and fabrication of piping system and pipe fitting, generation of power through BIO Mass Technology ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nology. As regards Ground No. 1 of the Revenue s appeal, the Ld. AR submitted that the assessee company has collected amount towards employees contribution towards ESI PF and deposited to the Government on various dates as per challans issued. Undisputedly, the assessee has not disputed the fact that the employees contribution towards Provident Fund and ESI was filed after due date but before filing of the Income Tax Return. It is settled principle of law that amount deposited by the assessee on account of contribution towards PF ESI would qualify for deduction even though paid after the due dates prescribed under the Provident Fund and ESI Act but before filing of the Income Tax Return. The Ld AR relied upon the decision of CIT Vs. Vinay Cement Ltd. (2009) 313 ITR (ST.) 1 (SC). The Ld. AR also relied upon the decision of the Hon ble Delhi High Court in case of CIT Vs. AIMIL Ltd. (2010) 321 ITR 508 and the decision of the Hon ble Delhi High Court in case of Pr. CIT vs. Pro Interactive Service (India) Pvt. Ltd. ITA No. 983/2018 pronounced on 10.09.2018. As regards Ground No. 2 of the Revenue s appeal, the Ld. AR submitted that during the present Assessment Year, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. Vs. CIT (2015) 378 ITR 33 wherein it is held that in absence of any exempt income, disallowance u/s 14A was not permissible. As regards Ground No. 5 6 relating to additional ground before CIT(A) in respect of Carbon Credit amounting to ₹ 2,68,40,816/- being wrongly recorded as income, the Ld. AR submitted that the assessee could not get the credit certified from the concerned authority during the assessment proceedings and accordingly the management created a provisions of ₹ 2,68,40,816/- at the year-end which increased the net profit and closing stock by the said amount. Certification report dated 31/12/2012 and calculation of carbon credits and provisions were placed before the CIT(A) and CIT (A) after taking into considerations all the aspect has rightly deleted this addition. In-fact, the Assessing Officer, in his remand report observed that no taxable amount has been taken place and provisions has been written off in subsequent years i.e. Assessment Year 2012-13. The Ld. AR further relied upon the decision as follows:- 1. Pr. CIT Vs. Dodson Lindblom Hydro Power Pvt. ITA No. 1820 of 2016 dated 27.02.2019 Bombay High Court. 2. CIT Vs. Shree Cement Ltd. D. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d finding to that effect. There is no need to interfere with the findings of the CIT(A). Hence, Ground No. 2 is dismissed. 9. As regards Ground No. 3, in case of National Seeds Corporation Ltd. Vs. Additional CIT (ITA No. 6794/Del/2014) dated 4/4/2018 ITAT Delhi, it has been categorically held that the Explanation (2) of Section 37(1) was inserted w.e.f. 1st April 2015 and cannot be construed as to assessee s disadvantage in respect of the period prior to this amendment and thus, supports the case of the assessee. Hence, Ground No. 3 is dismissed. 10. As regards Ground No. 4, it is clear finding in assessment order as well as by the CIT(A) that there is no exempt income earned by the assessee during the year. Hence, the decision of the Hon ble Delhi High Court in case of Cheminvest Ltd. (Supra) will be applicable. Hence, Ground No. 4 is dismissed. 11. As regards Ground No. 5 6 relating to provision for carbon credits, it is pertinent to note that the assessee admitted that the provision of carbon credits was inadvertently included in the taxable income of the assessee, though the same is not taxable under the Act. Besides this no sale of carbon credits took place duri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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