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TMI Blog2021 (4) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) erred in law and on facts of the facts of the case in deleting the addition of Rs. 11,75,214/- made by AO on account of sales promotion & festival expenses." 3. "Ld. CIT(A) erred in law and on facts of the facts of the case in deleting the addition of Rs. 87,82,889/- made by AO on account of expenditure incurred on Corporate Social Responsibility." 4. "Ld. CIT(A) erred in law and on facts of the facts of the case in deleting the addition of Rs. 16,83,921/- made by AO u/s 14A of the Income Tax Act, 1961 read with rule 8D of the Income Tax Rules 1962." 5. "Ld. CIT(A) erred in law and on facts of the facts of the case in admitting additional ground regarding allowability of provisions of carbon credits." 6. "Ld. CIT(A) erred in l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 3 relating to addition of Rs. 87,82,889/- made by the Assessing Officer on account of expenditure incurred on Corporate Social Responsibility, the Ld. DR submitted that the Assessing Officer has given a detailed reasoning as to why the said expenditure cannot be allowed to the assessee. As regards to Ground No. 4 relating to addition of Rs. 16,83,921/- made by the Assessing Officer u/s 14A of the Income Tax Act, 1961 read with Rule 8D of the Income Tax Rules, 1962, the Ld. DR submitted that the Assessing Officer has rightly made the said disallowance. As regards Ground No. 5 and 6, the Ld. DR submitted that the CIT(A) erred in admitting the additional ground regarding the allowability of provisions of carbon credits. The Ld. DR further s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round No. 2 of the Revenue's appeal, the Ld. AR submitted that during the present Assessment Year, the assessee claimed expenses under the head Sales Promotion at Rs. 20,20,436/- and Diwali expenses at Rs. 8,76,320/-. The Ld. AR submitted that the Assessing Officer disallowed these expenses these are personal in nature. The Ld. AR submitted that the assessee is maintaining regular books of accounts and the same are being audited. Complete details of expenses were produced before the Assessing Officer. The Assessing Officer has not at all pointed out that expenditure was incurred for personal purpose. The Ld. AR relied upon the Delhi High Court decision in case of DCIT Vs. Haryana Oxygen Ltd. (1999) 76 ITD (Del) 32 and Friends Clearing Agenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be allowed as deduction u/s 37 of the Act. As regards Ground No. 4, the Ld. AR submitted that during the year under construction the assessee company has not earned any exempt income. The Ld AR relied upon the decision in case of Cheminvest Ltd. Vs. CIT (2015) 378 ITR 33 wherein it is held that in absence of any exempt income, disallowance u/s 14A was not permissible. As regards Ground No. 5 & 6 relating to additional ground before CIT(A) in respect of Carbon Credit amounting to Rs. 2,68,40,816/- being wrongly recorded as income, the Ld. AR submitted that the assessee could not get the credit certified from the concerned authority during the assessment proceedings and accordingly the management created a provisions of Rs. 2,68,40,816/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue, without considering the decision of the Hon'ble Delhi High Court in case of CIT vs. AIMIL Ltd. (2010) 321 ITR 508 (Del.). But the Ld. AR relied upon the decision of the Hon'ble Delhi High Court in case of Pr. CIT vs. Pro Interactive Service (India) Pvt. Ltd. ITA No. 983/2018 pronounced on 10.09.2018 wherein the Hon'ble High Court decided the issue in favour of the assessee relying upon the judgment of AIMIL Ltd. (supra). The Hon'ble Delhi High Court held that the legislative intent was/is to ensure that the amount paid is allowed as expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee's Provident Fund (EPD) and Employee's State Insurance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t income earned by the assessee during the year. Hence, the decision of the Hon'ble Delhi High Court in case of Cheminvest Ltd. (Supra) will be applicable. Hence, Ground No. 4 is dismissed. 11. As regards Ground No. 5 & 6 relating to provision for carbon credits, it is pertinent to note that the assessee admitted that the provision of carbon credits was inadvertently included in the taxable income of the assessee, though the same is not taxable under the Act. Besides this no sale of carbon credits took place during the year under consideration. The Assessee submitted the basis for creation of said provision by submitting the calculation of provision, basis for the same and a certification report and these documents were verified by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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