TMI Blog2021 (7) TMI 1389X X X X Extracts X X X X X X X X Extracts X X X X ..... mere provision for bad debts which is not deductible and for this, she relied on the assessment order. Before us assessee stated one fact that the assessee has obliterated the provision that bad debts in the books of accounts by reducing the same from balance of debtors and had shown the net balance of debtors on the asset side of the balance sheet. He stated that the issue is squarely covered by the decision Vijaya Bank [ 2010 (4) TMI 46 - SUPREME COURT ] and also Jain insurance corporation of India [ 2000 (9) TMI 13 - BOMBAY HIGH COURT ] wherein it is observed that writing off is a technical term and means raising a debit entry to the P L Account and the corresponding credit may be given either to debtors or to reserve for bad debts. Further the court has observed that where the assessee has debited P L account and has credited reserve for bad debts, the same would be sufficient for claiming deduction under section 36(1)(vii) of the Act.This issue of Revenue s appeal is dismissed. Employees contribution to provident fund beyond due date of respective statute - HELD THAT:- As decided in SALZGITTER HYDRAULICS PRIVATE LIMITED [ 2021 (6) TMI 1059 - ITAT HYDERABAD] provident fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eating the interest credited to the grant in aid as income chargeable to tax under the head income from other sources. For this, Revenue has raised the following ground No. 1:- 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of additions made by the AO of Rs. 48,30,94,244/- relying on various judicial pronouncement and without appreciating the facts that assessee has not business activity and the income chargeable to tax is under the head of income Income from other sources. 3. At the outset, the learned Counsel for the assessee took us through Para 5.2 of the CIT(A) s order wherein it is held that the interest earned on FD made out of unutilised grants cannot be treated as income and CIT(A) relying on the order of appeal for AY 2007-08 deleted the addition by observing in Para 5.2 as under:- 5.2.1 These grounds relates to addition of Rs. 48.30 crore being interest earned on FDs made out of unutilised grants. This issue has been decided by me in favour of the appellant in their appeal for AY 200708 in Appeal no. CIT(A)-8/IT-361/15-16 dated 7/8/2017. 5.2.2 Since the facts and circumstances rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipal grant. A copy of AS - 12 is annexed herewith for reference. Similarly, ICDS - VII relating to government grants also does not prescribe any particular method for recognition of interest on unutilized grants. A copy of ICDS VII is already included in the factual paperbook. (Please refer page no. 114 to 116 of the factual paper-book) . 9. He has further relied upon following case laws :- Over-riding title of the Government CIT VS Sitaldas Tirathdas (41 ITR 367) Interest being characterized in the nature of grant CIT vs. SAR Infracon (P) Ltd. (Guj) 42 taxmann.com 405 CIT vs. Karnataka State Agricultural Produce Processing Export Corporation Ltd. (Kar) 57 taxmann.com 349 CIT Anr. Vs. Karnataka Urban Infrastructure Development Finance Corporation (Kar) 203 CTR 422 Gujarat Municipal Finance Board vs. Dy. CIT (Guj) 221 ITR 317 ITO v. Harijan Evam Nirbal Varg Avas Nigam Ltd. (Allahabad) 29 TTJ 57 Gujarat Power Corporation Ltd. vs. ITO (Guj) 25 taxmann.com 14 Gujarat Narmada Valley Fertiliser Co. Ltd. vs. ITO (And) 2 ITD51 Gujarat State Police vs. Asst. CIT (Ahd) 40 CCH 523 Tamil Nadu Ur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... publicity has been decided by the CIT(A) based on appeal of assessee for AY 2007-08. He referred to Para 5.3, which reads as under:- 5.3.1 These grounds relates to addition of ₹9,02,84,251/- on account of revenue grant for publicity. This issue has been decided by me in favour of the appellant in their appeal for AY 2007-08 in Appeal no. CIT(A)-8/IT-361/15-16 dated 7/8/2017. 5.3.2 Since the facts and circumstances relating to this issue remain the same, applying the same reasoning and following my earlier decision, these grounds are allowed. 8. The learned Counsel for the assessee further stated that this issue is squarely covered in assessee s own case in ITA Nos. 642324, 6431 6439/Mum/2017 for Assessment Years 2007-08 to 201011 respectively vide order dated 01.06.2021, whereby Tribunal in Para No. 12 to 14 has considered as under:- 12. The learned CIT(A) deleted the disallowance holding as under : 5.2.2 It is not in dispute that the appellant receives both Capital and Revenue grants from the Government which are to be utilized as per the terms of the grant. As per the accounting policy followed by the appellant company, the Revenue grants are c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith learned CIT(A) that on the principle of consistency the Assessing Officer s action is not justified without pointing out why contrary view from earlier year is being taken. Hence, we uphold the order of learned CIT(A). 9. We noted that this revenue grant in aid is already covered by Tribunal s decision in assessee s own case for earlier assessment years. The facts being similar and Revenue now before us could not point out any different in facts or legal position. Nothing contrary was brought to our notice, we uphold the order of CIT(A). This issue of Revenue s appeal is dismissed. 10. Coming to next issue of Revenue s appeal against the order of CIT(A) deleting the disallowance of bad debts written off. For this reason Revenue has raised the following ground No.3: - 3. Whether on the facts and in the circumstances of the case and in law, the deletion of Rs. 4,99,08,222/- by the Ld CIT(A) relying on Supreme Court decision in the case of TRF Ltd Vs CIT 323 ITR 397, is misplaced, as the decision relates to the actual bad debts written off, whereas, in the instance case only provision have been made, which are yet to be written off. 11. The brief facts relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance of debtors on the asset side of the balance sheet. He stated that the issue is squarely covered by the decision of Hon ble Supreme Court in Vijaya Bank Vs. CIT Anr. 333 ITR 166 (SC) and also Hon ble Bombay High court in the case of CIT vs. Jain insurance corporation of India 254 ITR 204, wherein it is observed that writing off is a technical term and means raising a debit entry to the P L Account and the corresponding credit may be given either to debtors or to reserve for bad debts. Further the court has observed that where the assessee has debited P L account and has credited reserve for bad debts, the same would be sufficient for claiming deduction under section 36(1)(vii) of the Act. In the given facts, the issue is squarely covered by the decision of Hon ble Supreme Court in the case of Vijaya Bank (supra) and also TRF Ltd.(supra). Hence, we find no infirmity in the order of CIT(A) and the same is confirmed. This issue of Revenue s appeal is dismissed. 13. The next issue in this appeal of Revenue is as regards to the order of CIT(A) deleting the disallowance made by Assessing Officer of employees contribution to provident fund beyond due date of respective stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee and the amount which are not paid by the assessee amounting to ₹1,28,798/- being claimed on account of employees contribution of provident fund. The balance amount of ₹9,08,873/- was paid after the due date as prescribed under the provident fund Act. She stated that the Assessing Officer clearly brought out the amount due and amount paid. Now, the learned CIT DR further stated that there is an amendment in the Provisions of Section 36(va), wherein explanation 2 was added by the Finance Act 2021, with effect from 01.04.2021 and the relevant explanation read as under: - [Explanation-2- For the removal of doubts, it is hereby clarified that the provisions of section 43B shall not apply and shall be deemed never to have been applied for the purposes of determining the due date under this clause;] 17. The learned CIT DR stated that this is only clarificatory explanation and normal presumption is that these provisions have been in the Act from the very inception, once it is clarificatory for this, she relied on CIT v. Podar Cement (Pvt.) Ltd. [1997] 226 ITR 625 (SC) and CIT vs. Gold Coin Health Food (P.) Ltd [2008] 304 ITR 308 (SC). 18. On the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, we find no infirmity in the order of Commissioner of Income Tax (Appeals). Hence, the appeal of the Revenue is dismissed. ITA No. 6425/Mum/2019 for AY 2011-12 20. The only issue in this appeal of Revenue is as regards to the order of CIT(A) deleting the penalty levied by Assessing Officer under section 271(1)(c) of the Act in regard to interest credited to the account of the assessee on account of grant in aid, amounting to ₹25,44,62,706/-. For this Revenue has raised the following ground No.1:- 1. Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) was justified in deleting the penalty amounting to ₹8,45,26,150/- imposed under section 271(1)(c)? 21. At the outset, it is noticed from the Tribunal s order in assessee s own case that the addition of interest on unutilized grant in aid in respect of which penalty has been levied was deleted by CIT(A) and which deleting has been confirmed by Tribunal further. The Tribunal in ITA No. assessee s own case for ITA Nos. 6423-24, 6431 6439/Mum/2017 for Assessment Years 2007-08 to 2010-11 respectively vide order dated 01.06.2021, has deleted the quantum addition, hen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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