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TMI Blog2009 (11) TMI 924X X X X Extracts X X X X X X X X Extracts X X X X ..... though the assessee had failed to discharge its obligation to establish that he expenses were incurred wholly and exclusively for the purposes of the business as provided in section 37(1) of the Income-tax Act, 1961. 2. Brief facts are that it is noted by the Assessing Officer on page 3 of the assessment order that he assessee has debited an amount of ₹ 2288363/- as site expenses to the P L A/c. It is further noted by the Assessing Officer that these expenses include expenditure on various heads like lodging, boarding, conveyance etc. for which no third party vouchers were available with the assessee and such expenditure were incurred in cash and have been claimed on the basis of self-made vouchers. The Assessing Officer disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal has deleted similar disallowances which was made by the Assessing Officer in those years under identical facts. We, therefore, find no reason to interfere in the order of the Commissioner of Income-tax (Appeals) on this issue. This ground of the Revenue is rejected. 5. Ground no.2 of the appeal reads as under: On the facts and in the circumstances of the case, the Ld.CIT(A) has erred on facts and in law in deleting the addition of ₹ 1,08,992/- made by the Assessing Officer on account of cessation of liability u/s 41(1) of the Income-tax Act, 1961 even though the as had failed to prove that liability subsists. 6. Brief facts are that it is noted by the Assessing Officer in para.3 of the assessment order that he asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions. We find that this is an admitted position that he assessee is showing both these amounts as a liability in its balance sheet. The assessee has not written back the liability and has not credited the same to the P L A/c. Under these facts, we now examine the applicability of section 41(1) of the Act and the judgment of Hon ble Apex Court rendered in the case of Sugauli Sugar Works (supra). We find that as per section 41(1), if there is remission or cessation of a trading liability, the same is to be added as income of the assessee u/s 41(1). With effect from 1.4.1997, Explanation 1 has been added to section 41(1) as per which, remission or cessation of any liability include an unilateral act of the assessee of writing off such liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s judgment of Hon ble Apex Court, we decide this issue in favour of the assessee. This ground of the Revenue is rejected. 9. Ground no.3 of the appeal reads as under: On the facts and in the circumstances of the case, the Ld.CIT(A) has erred on facts and in law in deleting the addition of ₹ 1,17,500/- made by the Assessing Officer on account of late deposit of employees contribution towards PF ESI disregarding he fact that he payments were made beyond the due dates and were, therefore, not allowable u/s 36(1)(va) and were to be treated as income u/s 2(24)(x) of the Income-tax Act, 1961, in contravention of the decision in the case of CIT vs. Pamwi Tissues Limited 215 CTR 150 (Bom.). 10. Brief facts are that it is noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal by way of cross objection. In that year, the Commissioner of Income-tax (Appeals) has confirmed the disallowance on account of late deposit of employees contribution to PF ESI. In that year, the Tribunal has deleted this disallowance by following the judgment of Hon ble Delhi High Court rendered in the case of P.M. Electronics Ltd. (supra). Since the facts are identical in the present year, we find no reason to take a contrary view in the present year and hence by respectfully following the precedence, in this year also this issue is decided in favour of the assessee. This ground of the Revenue is also rejected. 12. Ground nos.4 5 are inter-connected which read as under: On the facts and in the circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter in appeal before the Commissioner of Income-tax (Appeals) for both these issues and the Commissioner of Income-tax (Appeals) has deleted both these disallowances by following the Tribunal s decision rendered in the case of DCIT vs. Haryana Oxygen Ltd., as reported in 76 ITD 32 and it was held by him that as per this Tribunal decision no such disallowance can be made in the hands of the company although the same may be treated as perquisite in the hands of the concerned director. The Commissioner of Income-tax (Appeals) has also followed the Tribunal decision in the assessee s own case for assessment year 2001-02 as per I.T.A. NO.2051/Del./05 dated 31.5.2007. Now, the Revenue is in appeal before us on both these issues. 15. Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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