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2018 (4) TMI 553 - ITAT VISAKHAPATNAMReopening of assessment - assessee had claimed the deduction for premium payments to LIC Gratuity fund of its employees in violation of the provisions of section 36(1)(v) & section 40A(7)(b) - Held that:- A.O. has reopened the assessment since the assessee has not taken the approval for gratuity fund/trust and the deduction is not allowable for contributions made to unapproved gratuity fund/trust, as per section 36(1)(v) of the Act and section 40A(7)(b) - During the appeal hearing assessee did not bring any other decision supporting the assessee’s case. The assessment has been reopened within four years, having material to show that the assessee has made incorrect claim leading to escapement of income. Therefore, no reason to interfere with the order of the Ld. CIT(A) and we uphold the order of the Ld. CIT(A) and dismiss the assessee’s ground on reopening of assessment. Addition towards gratuity premium payable/paid to LIC of India Limited - Held that:- The assessee has made the payments to the LIC towards group gratuity scheme directly in approved schemes. The assessee has also obtained the policy in favour of the bank. The assessee has no control over the funds contributed to LIC towards the gratuity. The assessee is receiving the gratuity payment directly from the LIC of India as per the scheme which is paid to the employee on happening of the event i.e. retirement or death or resignation. See Warner Hindustan Ltd.[1987 (8) TMI 52 - ANDHRA PRADESH High Court]. Since the facts are identical, respectfully following the view taken by the coordinate benches, we hold that the assessee is entitled for the deduction for payment of gratuity to LIC and accordingly, we set aside the order of the lower authorities and allow the appeal of the assessee. TDS on advertisement expenses - Held that:- In this case, it is an undisputed fact that the payments made by the assessee towards advertisement and professional charges attract the TDS and assessee failed to deduct the tax at source. Therefore, we do not have any hesitation to uphold the order of the Ld. CIT(A) and the assessee’s appeal on this ground is dismissed. Overdue interest on Non performing assets - accrual of income - Held that:- Respectfully following the view taken by the decision of Hon’ble Gujarat High Court in the case of Sri Mahila Sewa Sahakari Bank Limited (2016 (8) TMI 377 - GUJARAT HIGH COURT), we hold that the interest on NPA is to be recognized on actual receipt basis but not on accrual basis. Accordingly, we set aside the orders of the lower authorities and delete the addition. The appeal of the assessee on this ground is allowed. Disallowance of prior period expenses - Held that:- Since the expenditure was not debited in the year under consideration, we uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue on this ground. Disallowance of amortization expenditure - A.R. argued that the expenditure was relatable to the internal furnishings in the leased premises and the A.O. has neither allowed depreciation nor allowed the amortization of expenditure - Held that:- no details were furnished either before the A.O. or before the CIT(A). During the appeal hearing also, the assessee has not furnished any details. Therefore, we set aside this issue to the file of the A.O. to examine the issue with regard to the nature of expenditure and allow the depreciation as per law. Addition u/s 40(a)(ia) - assessee had paid interest of ₹ 13,50,831/- to the Income Tax Department for different defaults - Held that:- On verification, the disallowance made by the A.O., the payment is related to the Income Tax payment relating to interest on income tax, which is not allowable expenditure. Therefore, we do not find any infirmity in the order of the CIT(A) and the same is upheld.
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