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TMI Blog2019 (1) TMI 2065X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicating additional ground raised during the course of proceedings before him praying that employer's contributions to PF etc. paid even after end of previous year but on or before due date of return of income be held as not disallowable u/s. 43B of the Act. 4. CIT(A) has grievously erred in fact and in law in not allowing entire amount of claim of PF damages, levied u/s. 146 of the P.P. Act, of Rs. 2,26,888/- and, instead, allowing claim of 40% of the damages by holding it as compensatory in nature. 5. CIT(A) has grievously erred in fact and in law in upholding disallowance of salary and wages of employees of appellants' Packart Press Unit. 6. CIT(A) has grievously erred in fact and in law in upholding disallowance u/s.40A(9) in respect of payment to Ambalal Sarabhai Foundation. 7. CIT(A) has grievously erred in fact and in law in upholding disallowance 50% of foreign travel expenses of working directors even though issue is decided in appellants' favour by him in AY 2001-02, 2002-03, 2003-04 and 2009-10 and Department has not challenged the issue further before Hon. ITAT. 8. CIT(A) has grievously erred in fact and in law in rejecting appellants' clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure, and following the decision by Tribunal cited before him. 42. We have heard the parties and perused the material on record. The A.O. has we find adopted a global approach in the matter and brought about the instances where the assessee was unable to substantiate its claim of the relevant expenditure being incurred only and exclusively for business purposes. No presumption it is trite, can hold, and it is only on a determination of the discrepancies in the assessee's claim can be proceed to estimate the same by applying a percentage that he considers justified, also delineating the reason for the same, so that the appellate authority would while adjudicating on quantum, i.e., where required to do so, be aware of the same, and consider it on merits. Under the circumstances, we find no infirmity in the order of the Ld. CIT(A), and uphold the same on this ground. 8. We find Co-ordinate Bench decided matter in favour of assessee as noted above. We find that ld. CIT(A) has already granted relief to the assessee in assessment year 1995-96 & 1996-97 in similar facts. So, we allow this ground of appeal. 9. Now we come to confirming disallowance u/s. 43B in respect of employer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vide 7th Ground of appeal, the appellant has challenged the action of the AO of disallowing of PF damages U/S. 14B of the PF Act amounting to Rs. 3,78,148/-. In the appellate order for AY. 1998-99, identical issues were involved and in the appellate order, 40% of the disallowance has been considered as compensatory in nature and has been allowed by way of deduction in computation of total income. Following the same, 40% of Rs. 3,78,148/- i.e. Rs. 1,51,259/- is directed to be allowed as a deduction in computation of income and disallowance of the balance amount is upheld. 14. Ld. A.R. has cited an order of ITAT in which ITAT had decided the issue against the assessee. Therefore, respectfully following the same, we confirm the disallowance of Rs. 2,26,888/- being claim of damages levied u/s. 14B. 15. Now we come to ground relating to upholding disallowance of Rs. 45,85,598/- being salary and wages of employees of Packart Press Unit. 16. The ld. A.O. has discussed this issue at page no. 16 to 19 in Para 13 and ld. CIT(A) has discussed the issue at page no. 8 & 9 in Para 4.9. Ld. A.R. cited an order of ITAT.. This issue we set aside to the file of the A.O. to decide the matter. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lating to confirming disallowance of 50% of Foreign travel expenses. 22. The ld. A.O.; has discussed this issue at page no. 25 in Para 22 and ld. CIT(A) has discussed at page no. 15 to 18 in Para 4.17. As we can see, one of the Director Dr. Anand Sarabhai visited USA for company related discussion with various customers to whom company is exporting its product vis Amphoteicin B and met various other parties for export and has submitted foreign tour details to the lower authorities. Therefore, we allow this ground of appeal. 23. Now we come to ground relating to confirming disallowance made for employees contribution. 24. Ld. CIT(A) has discussed this issue at page no. 19 Para 4.19. This issue is covered against the assessee by the judgment of Hon'ble Gujarat High Court in the matter of GSRTC 91 taxmann.com 100 (Guj.) Therefore, respectfully following the Jurisdictional High Court, we dismiss this ground of appeal. 25. In the result, appeal filed by the Assessee is partly allowed. 26. ITA No. 1313/Ahd/2016 Revenue's appeal for A.Y. 1999-2000. The revenue has taken following grounds: 1. "On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deletin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n off in books if they are covered u/s. 36(2)(i) of the Income tax Act, 1961. 8. The Ld. CIT (A) erred in allowing expenses of Rs. 448924/- claimed as foreign exchange difference without appreciating the fact that such liabilities would become ascertained liability on the date of actual payment and it would be allowed in the year of payment. 9. Ld. CIT(A) erred in allowing payment of Rs. 12551189/- made to ONGC without appreciating the fact that the assessee is following the mercantile system of accounting in which the expenses related to prior period are not allowable expenses. 27. So far the issue deleting addition of buying commission to Teknoserv (Jersey) Ltd. 28. Ld. A.O. has discussed the same at page nos. 5 & 6 in para 5 and ld. CIT(A) has discussed this issue at page nos. 2 & 3 in Para 4.1. The ld. A.O. disallowed the payment of Rs. 3086065/-. An identical issue were involved in appellant's own case for earlier year in CIT order for assessment year 1998-99 it has been mentioned that the issue decided in favour of the assessee in earlier year and accordingly commission payment of Rs. 3086065/- was allowed by the ld. CIT(A). Ld. A.R. cited an order of Co-ordinate Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t A.O. was of the opinion that expenses pertained to earlier year and same cannot be allowed in the year in which it has been disallowed. 34. In support of its contention, assessee cited a judgment of Hon'ble Supreme Court in the matter of Saurshtra Cement & Chemicals Industries vs. CIT 213 ITR 532 wherein it has been held that in such circumstances claim of the assessee to be allowed. Therefore, we dismiss this ground of appeal of the revenue. 35. Now we come to ground related to balance written off of Rs. 79,478/-. The ld. A.O. has discussed this issue at page no. 22 in Para 18 and ld. CIT(A) has discussed this issue at page no. 12 in Para 4.13 and in support of its contention, ld. A.R. cited an order of Co-ordinate Bench in ITA No. 1956/Ahd/2001 wherein this issue was decided in favour of the assessee with following observations: "26. The last and eleventh ground of the Revenue's appeal relates to the disallowance in respect of sundry debit balances written off at Rs. 38,008/-. The assesses has claimed the same to be only in the nature of a business loss, being incurred in the normal course of its business; the said sum representing tender deposit money (Rs. 10,000/-) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r charging interest on the delayed payments. 10. On perusal of the judgment of the Supreme Court dated 26.7.2001, it appears that the interest claim raised by the ONGC in its entirety was accepted by the Supreme Court. Thus, one possible view would be that the entire liability of interest even at compounded rate got crystallized by the judgment of the Supreme Court dated 26.7.2001. What happened thereafter was merely negotiations and representations and eventual decision of ONGC to offer soft terms to the assessee and other consumers of the natural gas to pay simple interest on the condition that the entire amount would be paid in one installment within 60 days of acceptance of such offer. We may notice that the Supreme Court by said judgment dated 26.7.2001 while confirming interest liability of the consumers had granted 60 monthly equal installments for payment. 11. Seen from this angle, at any rate the assessee's liability to pay interest computed at simple rate was crystallized on 26.7.2001, and at no later point of time. Merely because the assessee was negotiating with the ONGC alongwith other members of the association HC-NIC Page 8 of 9 Created On Fri Mar 04 01:17:50 IST ..... X X X X Extracts X X X X X X X X Extracts X X X X
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