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TMI Blog2020 (12) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... only and not u/s. 37(1) as contended by Ld A.R. Provisions of section 43B of the Act would also apply to the Provision for retention bonus. As per the provisions of section 43B of the Act, the provision for retention bonus is not allowable as deduction. As per the proviso to sec. 43B, the amount paid before the due date for filing return of income out of the provision so created is allowable as deduction. Admittedly, the assessee has paid a sum out of the provision so created, before the due date for filing return of income. Accordingly, we are of the view that the Ld. CIT(A) was justified in directing the A.O. to restrict the disallowance being the amount not paid before the due date for filing return of income out of provision for rete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, the same is dismissed as not pressed. Remaining grounds give rise to following issues. a) Disallowance of provision for retention bonus. b) Addition of interest income. 3. The assessee is engaged in the business of providing IT enabled services in the form of back office operations in the area of loan servicing. 4. The first issue relates to disallowance of provision for retention bonus. The A.O. noticed that the assessee has claimed a sum of ₹ 1,14,18,059/- as expenditure towards Provision for retention bonus. The assessee explained that it relates to retention bonus payable to its employees who have already rendered services for the year under consideration. The A.O. took the view that the provision so created is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the A.O. requesting him to restrict the disallowance to ₹ 97,05,992/-, being the amount not paid before the due date for filing return of income. Accordingly, the Ld. CIT(A) directed the A.O. to restrict the disallowance to ₹ 97,05,992/-. 7. The Ld. A.R. contended that the provision for retention bonus is allowable as deduction u/s. 37(1) of the Act. He further submitted that the Ld. CIT(A) was not justified in applying the provisions of section 43B of the Act to this claim of the assessee. On the contrary, the Ld. D.R. submitted that the provision for bonus is covered by the provisions of section 43B of the Act and hence the Ld. CIT(A) was justified in directing the A.O. to restrict the disallowance to ₹ 97,05,992/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come of ₹ 67,942/- on the ground that the same is not offered to tax by the assessee, even though it is reflected in form 26 AS and the TDS relating to the same was claimed. 10. We heard the parties on this issue and perused the record. We notice that the Ld. CIT(A) has not disposed of this ground in his order. Nevertheless the Ld. A.R. submitted that the interest income was received from M/s. Tata Power Company Ltd., which was adjusted against electricity bills raised by the above said company. Since the assessee had accounted for net amount of electricity bills, the interest income was not separately disclosed in the profit loss account. Accordingly, the Ld. A.R. submitted that the impugned interest income has actually been off ..... X X X X Extracts X X X X X X X X Extracts X X X X
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