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TMI Blog2021 (6) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961 with respect to Bonus not being credited/paid to the employees before due date of tiling of return of income. 2. On the facts and the circumstances of the case and in law the Ld. Principal Commissioner of Income Tax (OSD)/(Appeal)), Moradabad erred in accepting additional evidence/during the appellate proceedings in respect of addition made on account of the above disallowance u/s 43B of the Income Tax Act, 1961 without allowing a reasonable opportunity to the Assessing Officer to examine the correctness of the additional evidence as provided in Rule 46A(3) of the Income Tax Rule, 1962. 3. On the facts and the circumstances of the case and in law the Ld. Principal Commissioner of Income Tax (OSD)/(Appeal)), Moradabad erred in deleting the addition of Rs. 92,070/- made by the Assessing Officer on account of excess provision made for Audit Fees. 4. On the facts and the circumstances of the case and in law the Ld. Principal Commissioner of Income Tax (OSD)/(Appeal)), Moradabad erred in deleting the addition of Rs. 36.640/- made by the Assessing Officer u/s 40(a)(ia) of the Income tax Act, 1961 on account of non deduction of tax at source on Audit Fees of Rs. 36,640/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) preferred appeal before us. 4. We have considered the argument of both the parties as well as the orders of the lower authorities and then adjudicate the grounds raised before us accordingly. 5. The first ground of appeal is with respect to deletion of addition of Rs. 66 lakhs u/s 43B of the Act with respect to the bonus not credited or paid to the employees Account on or before the due date of filing return of income. The ld AO noted that assessee has made provision of Rs. 66 lakh for bonus payable to staff. The assessee submitted the ledger copy showing bonus payable and bonus paid in the subsequent years. According to the accounts bonus of Rs. 58,92,31,300/- was paid on 29/09/2012. The assessee submitted a certificate of Chartered Accountant to show that this sum was paid by assessee before the due date of filing of return of income. The ld AO rejected the certificate of the Chartered Accountant and held that the assessee could not submit anything to show that bonus was actually paid to the employees on or before the due date of filing of the return. Therefore, he disallowed unpaid bonus u/s 43B of Rs. 66 lakhs. The ld CIT(A) deleted the above disallowances. The reason be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es act, Chartered Accountants as per Reserve Bank of India and tax auditor u/s 44AB of the Act. Therefore, these three services rendered by three different agencies. The assessee made a provision based on the amount of advances and all other parameters for appointment and remuneration of auditors. Therefore, the provision is made based on working considering advances, and other circulars of RBI on estimated basis. So far as the issue of tax deduction at source is concerned the AO on the basis of amount of TDS made at Rs. 17,529/- proportionately allowed the amount and balance sum of Rs. 36,640/- was disallowed for non deduction of tax at source. Total expenditure incurred in respect of audit has been provided on above basis but subsequently payments are to be made to separate persons and subject to prescribed limit with respect to each payee. In the case of assessee the prescribed limit exceeded only in one case of payment of Rs. 1,75,290/- and therefore to that extent TDS was made. Ld CIT(A) deleted the disallowances for non deduction of tax at source stating that there was no requirement of tax deduction at source on sum to the extent of Rs. 36,640/-. In fact the provision of aud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t ex-gratia payment is like salary/ incentive which is allowable u/s 37(1) itself and therefore provision of section 43B does not apply to it. Assessee has submitted the copy of the resolution of Board of Directors of the assessee dated 27/09/2012 based on which the ex-gratia payment was paid. It is in the form of allowances to the various employees. The resolution also shows that these ex-gratia was paid in view of the higher banking operation and increase in the work load of the staff. The board also decided that the incentive would be paid to the performing employees only and would not be paid to the employees whose performance is not satisfactory. The bonus is a statutory liability according to the Payment Of Bonus Act. Thus, ex-gratia payment therefore do not partake the character of bonus. Therefore according to us the ld CIT(A) has correctly held that the provision of section 43B of the Act does not apply to ex-gratia payment and deleted the disallowance. . In view of this Ground No. 5 of the appeal is dismissed. 9. Ground No. 6 is with respect to deletion of addition of Rs. 19,01,000/- on account of exemption/ deduction u/a 80P(2) (d) in respect of dividend income received ..... X X X X Extracts X X X X X X X X Extracts X X X X
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