2020 (10) TMI 1224 - AT - Income Tax

Disallowance of provision made for privileged leave encashment - HELD THAT - This issue is covered against the assessee by the judgment of Hon ble Apex Court rendered in the case of UOI and Ors Vs. Exide Industries Limited 2020 (4) TMI 792 - SUPREME COURT as per this judgement, it was held by Hon ble Apex Court that clause (f) in section 43B of the Income Tax Act, 1961, is valid and operative for all purposes and this disallowance was made by the AO in both the years on the basis of this clause (f) of section 43B as can be seen on page 2 of the Assessment Order for Assessment Year 2011-12 and page 3 of the Assessment Order for Assessment Year 2012-13. In view of this factual and legal position, this issue is decided against the assessee. Disallowance of provision for Bad and Doubtful Debts under section 36 (1) (VIIa) - HELD THAT - The details as required as per Rule 6ABA were not furnished before the AO and the Tribunal restored the matter back to the file of the CIT(A) for a fresh decision after affording reasonable opportunity of being heard to both sides. Since the facts in the present two years are similar, in the present two years also, we restore this matter back to the file of CIT(A) for a fresh decision after obtaining the remand report from the AO if the assessee files the required details before the CIT(A) in compliance of Rule 6ABA. Needless to say learned CIT(A) should provide reasonable opportunity of being heard to both sides. Accordingly, the relevant ground on this issue is allowed for statistical purposes in both the years. TDS u/s 194A - disallowance of interest paid on bank deposits - Addition u/s 40(a)(ia) because Form No.15G / 15H were not submitted before the AO and no proof was submitted before the AO regarding filing the copy of the same before the concerned CIT - HELD THAT - An opportunity should be given to the assessee to bring on record the respective Form No.15G/15H received by the assessee and assessee should also bring evidence on record regarding submission of those Form No.15G/15H before the concerned CIT even if such submission before CIT is delayed submission. We direct he AO that if the assessee brings such evidences on record and if it is found that Form No.15G/15H were available with the assessee and copy of the same was submitted with concerned CIT even if belatedly, assessee will get the benefit of availability of such Form No.15G/15H. Hence, we restore this matter back to the file of the AO for a fresh decision

Summary

Issues Involved:
1. Disallowance of expenditure claimed under amortization.
2. Provision for privileged leave encashment.
3. Provision for standard assets.
4. Provision for bad and doubtful debts.
5. Bad debts written off.
6. Disallowance of interest paid on bank deposits.
7. Charging of interest under Sections 234B and 234C.

Detailed Analysis:

1. Disallowance of Expenditure Claimed Under Amortization:
The Revenue's appeals for Assessment Years 2011-12 and 2013-14 were dismissed. The Tribunal noted that the CIT(A) had allowed relief to the assessee based on the Tribunal's order in the assessee's own case for Assessment Years 2007-08 and 2009-10. The Revenue did not claim that this Tribunal order was stayed or reversed by the High Court. Therefore, no intervention was called for in the CIT(A)'s order.

2. Provision for Privileged Leave Encashment:
The assessee's appeals for Assessment Years 2011-12 and 2012-13 included a dispute over the disallowance of provision made for privileged leave encashment. The Tribunal found that this issue was covered against the assessee by the judgment of the Hon'ble Apex Court in UOI and Ors Vs. Exide Industries Limited, which upheld the validity of clause (f) in section 43B of the Income Tax Act, 1961. Consequently, this issue was decided against the assessee.

3. Provision for Standard Assets:
The assessee did not press the ground regarding the provision made on standard assets for both Assessment Years 2011-12 and 2012-13. Therefore, this ground was rejected as not pressed.

4. Provision for Bad and Doubtful Debts:
For both Assessment Years 2011-12 and 2012-13, the Tribunal restored the issue regarding the disallowance of provision for bad and doubtful debts to the file of the CIT(A) for a fresh decision. This decision was based on the Tribunal's order in the assessee's own case for Assessment Year 2010-11, where the issue was restored for lack of compliance with Rule 6ABA. The CIT(A) was directed to obtain a remand report from the AO if the assessee filed the required details.

5. Bad Debts Written Off:
The Tribunal did not specifically address this issue in the provided judgment text. It is presumed to be part of the broader issue of provision for bad and doubtful debts.

6. Disallowance of Interest Paid on Bank Deposits:
The issue regarding the disallowance of interest paid on bank deposits under section 40(a)(ia) of the Income Tax Act, 1961, was restored to the AO for a fresh decision. The Tribunal referred to its order in the case of Pragathi Krishna Gramin Bank Vs. ACIT, where it was held that if Form 15G/15H were filed before the respective CIT, even belatedly, the assessee would get the benefit. The AO was directed to verify the availability and submission of these forms.

7. Charging of Interest Under Sections 234B and 234C:
The Tribunal did not specifically address this issue in the provided judgment text.

Conclusion:
The appeals of the Revenue for Assessment Years 2011-12 and 2013-14 were dismissed. The assessee's appeals for Assessment Years 2011-12 and 2012-13 were partly allowed. The Tribunal restored certain issues to the CIT(A) and AO for fresh decisions with specific directions, ensuring that the assessee was afforded adequate opportunities to present their case.