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2015 (11) TMI 1008 - AT - Income TaxDeduction in respect of PF & ESI payments - CIT(A) allowed the claim - Held that - Once the issue is decided by Hon ble jurisdictional High Court in the case of Vijay Shree Ltd. 2011 (9) TMI 30 - CALCUTTA HIGH COURT where in it is held that the PF & ESI are paid on or before the due date of filing of return u/s. 139(1) of the Act, deduction in respect to the amount on which PF &ESI is so paid, is allowable. In the present case the assessee has paid the PF deducted on account of employees contribution before due date of filing of return u/s. 139(1) of the Act, hence, we dismiss this ground of appeal of revenue. Disallowance of puja expenses and temple expenses as business expenses - Held that - The puja expense incurred on occasion of Diwali and Mahurat are customary expenses and going by the turnover of the assessee-company and the nature of the business of the assessee, we feel that these are incurred for the harmony of the assessee-company s employees and these are for the purpose of business. Similar are the reasons for incurring temple expense. - Decided in favour of assessee. Addition made on account of cess on green leaf - CIT(A) allowed claim - Held that - This issue is covered by the decision of Hon ble jurisdictional High Court in the case of AFT Industries Ltd. V. CIT (2004 (7) TMI 81 - CALCUTTA High Court ), wherein it has been decided by Hon ble jurisdictional High Court that cess on green leaf is a normal business expenditure and once the Hon ble jurisdictional High Court decides the issue in favour of assessee, same is covered - Decided in favour of assessee. Non-deduction of TDS on expenses of commission payment u/s. 195(1) - CIT(A) allowed claim - Held that - Considering the Assessee s claim that the commission paid to foreign agents, who are not having permanent establishment business place in India and they are providing services outside India and even the payment is directly made outside India in foreign exchange. Assessee s income does not accrue or arise in India and once income does not accrue or arise in India, the assessee is not liable to deduct TDS on foreign payments. - Decided in favour of assessee. Deduction of wealth tax while computing book profit u/s. 115JB - Held that - No infirmity in the order of CIT(A) as he allowed the claim of assessee - Decided in favour of assessee. Disallowance of bad debt - CIT(A) allowed the claim - Held that - after 1st April, 1989, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. See TRF Ltd. Vs. CIT 2010 (2) TMI 211 - SUPREME COURT - Decided in favour of assessee. Disallowance of Nursery Expenses - Held that - The assessee has incurred expenditure for re-plantation in the existing area and plants grown in the nursery were used for replacement of dead plants within the plantation area. This fact has not been denied by revenue before CIT(A) or before us now. The AO also noted that this is re-plantation in the existing area and replacement of dead plants but by going through the volume of expenditure he made disallowance. Hon ble Calcutta High Court in the case of Tasati Tea Ltd. 2003 (2) TMI 42 - CALCUTTA High Court has considered the issue and allowed the claim of replacement of plants in existing area against dead plants - Decided in favour of assessee. Allow TDS and Advance Tax as per assessee s claim - Held that - CIT(A) has directed the AO to verify the TDS and advance tax challans, and accordingly allowed the claim of the assessee, and hence, revenue cannot be aggrieved on this count. Accordingly, we confirm the order of CIT(A) and this issue of revenue s appeal is dismissed.- Decided in favour of assessee.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Deduction of PF & ESI payments. 3. Allowance of puja and temple expenses as business expenses. 4. Deletion of addition on account of cess on green leaf. 5. Non-deduction of TDS on commission payments. 6. Deduction of wealth tax while computing book profit u/s. 115JB. 7. Disallowance of bad debt. 8. Deletion of disallowance of nursery expenses. 9. Verification of donation certificates. 10. Verification of TDS and advance tax credits. Detailed Analysis: 1. Condonation of Delay in Filing the Appeal: The appeal by the revenue was delayed by 24 days. The revenue filed a condonation petition supported by an affidavit stating the reasons for the delay. The counsel for the assessee conceded to the reasons, and thus, the delay was condoned, and the appeal was admitted for hearing. 2. Deduction of PF & ESI Payments: The first issue was regarding the CIT(A)'s order allowing the deduction of PF & ESI payments. The AO disallowed the payments as they were not made within the due dates under the respective Acts. However, the CIT(A) noted that the payments were made within the due date of filing the return of income u/s. 139(1). The Tribunal referenced the jurisdictional High Court's decision in CIT Vs. M/s. Vijay Shree Limited, which allowed such deductions if payments were made before the due date of filing the return. Consequently, the Tribunal dismissed the revenue's appeal on this ground. 3. Allowance of Puja and Temple Expenses: The second issue was the allowance of puja and temple expenses as business expenses. The AO disallowed these expenses, but the CIT(A) allowed them. The Tribunal referenced its own decision in the assessee's case for AY 2007-08, where such expenses were considered customary and for the harmony of employees, thus allowable as business expenses. The Tribunal confirmed the CIT(A)'s order and dismissed the revenue's appeal. 4. Deletion of Addition on Account of Cess on Green Leaf: The third issue was regarding the deletion of the addition made on account of cess on green leaf. The CIT(A) allowed the deduction based on the Calcutta High Court's decision in AFT Industries Ltd. Vs. CIT, which treated cess on green leaf as a normal business expenditure. The Tribunal upheld the CIT(A)'s decision, noting that the issue was covered by the jurisdictional High Court's ruling, and dismissed the revenue's appeal. 5. Non-Deduction of TDS on Commission Payments: The fourth issue involved the deletion of the addition due to non-deduction of TDS on commission payments. The CIT(A) allowed the claim, referencing the Supreme Court's decision in GE India Technology Centre P. Ltd. v. CIT, which clarified that TDS is required only when the income is chargeable under the Act. The Tribunal found no reason to interfere with the CIT(A)'s order and dismissed the revenue's appeal. 6. Deduction of Wealth Tax While Computing Book Profit u/s. 115JB: The fifth issue was the deduction of wealth tax while computing book profit u/s. 115JB. The CIT(A) allowed the deduction based on a decision by the ITAT in Usha Martin Industries Ltd. The Tribunal found no infirmity in the CIT(A)'s order and dismissed the revenue's appeal. 7. Disallowance of Bad Debt: The sixth issue was the disallowance of bad debt. The assessee had written off a loan given in the normal course of business as irrecoverable. The CIT(A) allowed the claim, referencing the Supreme Court's decision in TRF Ltd. Vs. CIT, which stated that it is sufficient if the bad debt is written off as irrecoverable in the accounts. The Tribunal upheld the CIT(A)'s order and dismissed the revenue's appeal. 8. Deletion of Disallowance of Nursery Expenses: The seventh issue involved the deletion of nursery expenses disallowance. The CIT(A) allowed the expenses as revenue expenditure based on the jurisdictional High Court's decision in CIT Vs. Tasati Tea Ltd., which treated such expenses as maintenance rather than capital expenditure. The Tribunal upheld the CIT(A)'s order and dismissed the revenue's appeal. 9. Verification of Donation Certificates: The eighth issue was the CIT(A)'s direction to the AO to allow donations subject to verification of certificates. The Tribunal found no reason for the revenue to be aggrieved since the CIT(A) merely directed verification. The Tribunal confirmed the CIT(A)'s order and dismissed the revenue's appeal. 10. Verification of TDS and Advance Tax Credits: The ninth issue was the CIT(A)'s direction to the AO to allow TDS and advance tax credits as per the assessee's claim, subject to verification. The Tribunal found no reason for the revenue to be aggrieved since the CIT(A) directed verification. The Tribunal confirmed the CIT(A)'s order and dismissed the revenue's appeal. Conclusion: The Tribunal dismissed the revenue's appeal on all grounds, confirming the CIT(A)'s orders on each issue. The order was pronounced in the open court on 30.10.2015.
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