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TMI Blog2017 (9) TMI 1399X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessee for statistical purposes. Disallowance of payment of bonus - Held that:- The assessee has demonstrated before us that two months wages were paid as bonus and reimbursed form M/s Jet Airlines India Ltd. The assessee paid bonus through vouchers which had been produced before the Assessing Officer. However, the Assessing Officer had denied this fact that no vouchers were produced by the assessee. Therefore, we are of the view that this issue requires fresh examination at the end of the Assessing Officer to examine the bonus vouchers and other related documents and information. Therefore, we direct the Assessing Officer to examine the bonus vouchers and other related information and adjudicate the issue afresh as per the provisions of the Act. Therefore, we allow this ground for statistical purposes. Addition on payment for extra work and tiffin expenses - CIT-A allowed claim - Held that:- The assessee has stated that late receipt of said payment from the Airlines, is a consistent practice over the year. As per the facts above, it seems that the sole reason for making disallowance is the suspicion of the Assessing Officer. The AO neither at the assessment stage nor at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds of appeals: 1. That both Ld. CIT(A) and A.O. wrongly disallowed the leave salary payment in the shape of staff welfare in violation of rate schedule as per agreement. 2. That both Ld. CIT(A) and A.O. wrongly disallowed the payment of Bonus of ₹ 11,27,852/-, despite production of relevant documentary evidences. 4. The first ground raised by the assessee relates to payment of leave salary of ₹ 22,13,975/- in the shape of staff welfare in violation of rate schedule as per agreement. 4.1 Brief facts qua the assessee are that the assessee (Smt. Gargi Poddar) is a proprietor of JSM Construction. She is a contractor and provides labours for different works including cargo handling, cabin cleaning, loading etc. to the various Air Lines and organization operating in the Kolkata Airport. The assessee provides labour forces and workers to Jet Airways, GMG Airline, Bureau of Civil Aviation Securities and Alsthom India. In order to provide workers and labourers to various airlines and organizations the assessee through his proprietory concern M/s JSM Construction, had entered into contractual agreement with the various airlines and organizations. The aforementioned agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation about the assessee's claim. The so-called staff welfare expenses of ₹ 22,13,975/- in the wages account instead of staff welfare account maintained by her where such expenses can be easily identifiable. The Ld. Assessing Officer observed that the assessee failed to establish the nature of staff welfare expenses, genuineness of payment of staff welfare expenses and whether such expenses has been a part of terms and condition of payment of workers/labourers and specially the payment has been made only in the month of March, 2010. Therefore, the Ld. Assessing Officer held that it was the onus of the assessee to substantiate her claim of expenses and establish genuineness of the same. After verification of the details, the Assessing Officer held that the assessee failed reasonably to discharge her onus of proving genuineness of the expenditure and establish that the same has been incurred for the purpose of business, therefore, the Assessing Officer rejected her explanation and made the addition of staff welfare expenses at ₹ 22,13,975/-. 4.2 Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the CIT(A) on the said issue, who has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave encashment and this was also not complied with. Therefore, after considering the above, the Ld. CIT(A) held that the claim of Staff Welfare in the shape of leave salary of ₹ 22,13,975/- is held to be a bogus claim to reduce the taxable profits of the assessee. Therefore, the Ld. CIT(A) confirmed this addition. 4.3 The Ld. Counsel for the assessee has submitted that during the assessment proceedings the assessee has submitted the details of leave salary payment. In the said detail, name of payee and the amount paid to the payee were written and the payee has signed the leave salary payment register. The Assessing Officer has overlooked the same and did not pay the attention that the leave salary payment was genuine payment. In case leave salary payment is to be paid from salary amount i.e. below ₹ 9,100/-. It was difficult for the assessee to maintain the vouchers for these small payments. The payee is accepted the payments and gave the acknowledgment to the assessee by putting his/her signature on the leave salary payment register, therefore, it is sufficient compliance on the part of the assessee. In addition to this, the Ld. Counsel for the assessee also pointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances, the wages paid in the month of September, 2009 amounting to ₹ 11,27,825/- was disallowed by the Assessing Officer. The Assessing Officer worked out the disallowance as follows: Continued…………. A.Wages claimed as per original wage summary 36,10,215 B.Less: Bonus reimbursed ( Not claimed in P. & L. A/c) 7,28,898 C.Net wages (A-B) 28,81,317 D.Less: Wages actually paid (The figure is revise as one page of register was missed) 17,53,492 Disallowance 11,27,825 Based on the above facts and circumstances, the claim of wages paid in the Month of Sept.2009 amounting to ₹ 11,27,825/- was disallowed by the Assessing Officer. 5.2 Aggrieved by the disallowance of ₹ 11,27,825/- made by the AO, the assessee filed an appeal before the ld CIT(A). Regarding payment of bonus of ₹ 11,27,852/- the Ld. CIT(A) observed that the assessee has assailed the disallowance of payment of bonus of ₹ 11,27,852/-. The Assessing Officer disallowed the sum of ₹ 11,27,852/- on the ground that the bonus was the liability of the Airlines and the Airlines have already reimbursed ₹ 7,28,898/- to the assessee. The Ld. CIT(A) observed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances, the Ld. CIT(A) was justified in allowing an amount of ₹ 21,28,773/- being claimed payment for extra work and tiffin expenses without any concrete evidential proof. 2.Whether on the facts and circumstances, the Ld. CIT(A) was justified in allowing an amount of ₹ 16,71,976/- being the employees' contribution towards ESI & PF which was paid beyond the due date as envisioned in Section 43B wherein Section 43B does not deal with employees' contribution towards ESI and PF." 8. The first ground raised by the Revenue relates to addition deleted by the Ld. CIT(A) of ₹ 21,28,773/- being claimed payment for extra work and tiffin expenses without any concrete evidential proof. 8.1 Brief facts of the case qua the issue are that the assessee paid extra work expenses and tiffin allowances amounting to ₹ 26,48,373/- and out of said amount, ₹ 21,28,773/- was claimed to be outstanding as on 31.03.2010. The Assessing Officer disallowed the said outstanding payment of ₹ 21,28,773/-. During the assessment proceedings, the assessee submitted that the payment of extra work and tiffin allowances were made through vouchers, so they were not recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /-, whereas as per ESI return, the amount of wages paid during the year comes to ₹ 193,51,686/-. In addition to this, the payments were made by the assessee in cash, by self-made vouchers and nobody believe on the self-made vouchers. The Ld. DR also pointed out that there was no reason to hold the payment of the workers on account of extra works claimed by the assessee and the workers cannot wait up to the closing of the accounting year. Therefore, considering these symptom the outstanding extra work and tiffin expenses is not genuine and the order of the Assessing Officer should be affirmed. 8.3. On the other hand, the Ld. Counsel for the assessee has submitted that the assessee has claimed in respect of the employees working in the airlines. Normally they have to put in extra time due to late arrival of flights etc. That is, when any flight comes late, the assessee suppose to pay extra wages to the workers. As a result, the assessee raises extra bills. The airlines for the extra work done by the employees for loading and unloading, cleaning, driver, step ladder, supervisor etc., verifies the claim and the bills are passed by the Airlines and at times there is deduction als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Revenue ( on ground no. 1) is dismissed. 9. The ground No.2 raised by the Revenue relates to contribution towards ESI and PF of ₹ 16,71,976/- which was paid beyond due date as envisioned in Section 43B. 9.1 Regarding disallowance of sum of ₹ 16,71,976/- being the employees contribution towards PF and ESI which was deposited by the employer after their respective due dates. The Assessing Officer rejected the assessee's claim that the same had been paid beyond due date as envisioned in Section 43B of the Act. However, the assessee paid the PF and ESI before the due date of filing of return of income. 9.2 The Ld. DR for the Revenue has submitted before us that the Assessing Officer has rightly rejected the assessee's claim that the sums had been paid before the due date of filing of return of income but in violation of Section 43B of the Act. The Ld. DR for the Revenue has stated that Section 43B does not apply in respect of employees' contribution towards ESI and PF. 9.3. On the other hand, the Ld. Counsel for the assessee has stated that this issue had already been covered in assessee's favour by the I.T.A.T. in the earlier years and the Hon'ble Calcutta High ..... X X X X Extracts X X X X X X X X Extracts X X X X
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