TMI Blog2022 (12) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... In this regard assessee has filed copy of the expenditure for three years i.e. for the F.Y. 2016-17, 2017-18 and 2018-19. Therefore, it clearly indicates that this expenditure is a recurring expenditure incurred by the assessee in this assessment year also. Therefore, merely observing that assessee has declared as a provision it cannot be disallowed. However, what is relevant is the nature of expenditure which assessee claims every year and AO has not expressed his view on the nature of expenditure which can be disallowed or which assessee is not allowed to claim. Therefore, the expenditure claimed by the assessee is an expenditure for the operation of the society allowable under the Act. Therefore, we direct the Assessing Officer to allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.28 of the Act. Therefore, the collections/recoveries from the employees are first treated as income of the assessee u/s. 28 of the Act and any payment within the due date of the respective Act is treated as application and however, when the assessee fails to deposits within due dates, the same is not allowable deduction u/s.36 of the Act. Therefore, the recovery from the employees are remain as income of the assessee. Therefore, we are not inclined to allow the ground raised by the assessee in this regard. Moreover, this ground raised by the assessee is not borne out of the order passed u/s.143(3) of the Act. Appeal filed by the assessee is partly allowed. - ITA NO. 831/MUM/2022 - - - Dated:- 11-11-2022 - SHRI AMIT SHUKLA, HON&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are in the nature of provisions. However, the disallowance u/s. 80P of the Act was allowed by the Ld.CIT(A). 3. Further, the Assessing Officer observed from the Profit and Loss Account that assessee has debited the expenditure towards provision for Special Memento to Members of Rs.17,44,000/- and provision for encashment of staff leave of Rs.50,000/- and the same was not added back in the computation of income. He observed that the provision is not an allowable expenditure, the said amount of Rs.17,94,000/- is disallowed and added to the income of the assessee. Aggrieved assessee preferred an appeal before the Ld.CIT(A) and Ld.CIT(A) sustained the addition made by the Assessing Officer. 4. Aggrieved assessee is in appeal before us r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. Ld. AR submitted that the assessee declared net profit of Rs.1,02,96,510/- which is derived after credit of the interest/ dividend of Rs.4,52,84,891/- to the income and expenditure account. The assessee has business loss of Rs.3,49,88,381/- which is setoff against the above said interest/dividend income. Therefore, the profit declared by the assessee is deductible u/s.80P of the Act and the disallowance made by the Assessing Officer will increase the income declared by the assessee to the extent of the disallowance. Therefore, the new net profit is also deductible u/s. 80P of the Act, therefore, this has an effect of revenue neutrality. Ld. AR prayed that in both counts the disallowance made by the Assessing Officer has to be allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merely observing that assessee has declared as a provision it cannot be disallowed. However, what is relevant is the nature of expenditure which assessee claims every year and Assessing Officer has not expressed his view on the nature of expenditure which can be disallowed or which assessee is not allowed to claim. Therefore, the expenditure claimed by the assessee is an expenditure for the operation of the society allowable under the Act. Therefore, we direct the Assessing Officer to allow this expenditure as a regular expenditure allowable for this assessment year. 9. With regard to provision for encashment of staff leave which assessee has claimed as the expenditure, we observe that the assessee claims certain expenditure as a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt is of the view that the assessee has to follow the due date in the respective Act of PF and ESC to deposit the Employee Contribution in order to safeguard the interest of the employees. Any delay in depositing the contribution received by them is chargeable to tax u/s.28 of the Act. Therefore, the collections/recoveries from the employees are first treated as income of the assessee u/s. 28 of the Act and any payment within the due date of the respective Act is treated as application and however, when the assessee fails to deposits within due dates, the same is not allowable deduction u/s.36 of the Act. Therefore, the recovery from the employees are remain as income of the assessee. Therefore, we are not inclined to allow the ground rai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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