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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 ..... mitted by the ld CIT(A) and what is irregularities if so admitted. On reading of the order of ld CIT(A) we could not find that the CIT(A) has admitted any additional evidences or any such additional evidence is produced before him. In view of this Ground No. 2 of the appeal is dismissed. Addition on account of excess provision made for audit fees - CIT(A) deleted the disallowances for non deduction of tax at source stating that there was no requirement of tax deduction at source - HELD THAT:- Provision of audit fees was based on the advances of each of the branch and the fees is computed head wise for each branch based on the advances and equired audit fees , the amount of out of pocket expenditure as per slab is also worked out. Further, on the amount of audit fee the provision of the services tax was also to be made. The fees for head office and consolidation of the branches in audit was also to be separately worked out. Based on this the assessee made the above provision. In view of this it cannot be said that the provision made by the assessee is unreasonable or without any basis. Anyway the excess provision made by the assessee for this year would also be reversed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Though the ld CIT(A) held that the dividend income is also tainted with mutuality. However, without discussing this aspect we hold that dividend under the provisions of section 80P(2)(d) the above sum is deductible in the hands of the assessee. Therefore the claim of the assessee is otherwise allowable but for different reasons. Thus, in substance Ground No. 6 and 7 of the appeal of the AO is dismissed. Deduction u/s 36(1)(viia) - Claim which was not involved in the assessment order and nor it was claimed by the assessee in its return of income or allowed by the ld AO - HELD THAT:- Even on reading of the order of the ld CIT(A) we find that he has decided the issue on the basis of judicial presidents only. For the purpose of allowances of the claim u/s 36(1)(viiia) though assessee being a cooperative banking society qualifies for the above deduction in respect of provision of bad and doubtful debts made. However, the claim of the assessee is always restricted by the aggregate average aggregate advance made by the rural branches of the bank. The rural branches of the bank are defined in explanation 1 of that section. Therefore, it would be imperative for the assessee to show tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded 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 ₹ 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 ₹ 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 ₹ 36,640/-. 5. 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 ₹ 77,00,000/- made by the Assessing Officer u/s 43B of the Income tax Act, 1961 with respect to Ex-Gratia/Bonus not being credited/paid before due date of filing of return of income. 6. 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 & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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 ₹ 66 lakhs. The ld CIT(A) deleted the above disallowances. The reason being that the assessee has paid the bonus to its employees of various branches based on the certificate of the Chartered Accountant which was issued after verification by the CA. Thus he deleted the disallowances. Before us the assessee has submitted the ledger account of the bonus payable, certificate of Chartered Accountant and further the names of each of the employee to whom the bonus was paid showing the names of the employees, designation, amount of bonus and Account No. of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion at source is concerned the AO on the basis of amount of TDS made at ₹ 17,529/- proportionately allowed the amount and balance sum of ₹ 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 ₹ 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 ₹ 36,640/-. In fact the provision of audit fees was based on the advances of each of the branch and the fees is computed head wise for each branch based on the advances and equired audit fees , the amount of out of pocket expenditure as per slab is also worked out. Further, on the amount of audit fee the provision of the services tax was also to be made. The fees for head office and consolidation of the branches in audit was also to be separately worked out. Based on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 19,01,000/- on account of exemption/ deduction u/a 80P(2) (d) in respect of dividend income received from other cooperative societies. The assessee is a cooperative society which has contributed its funds towards shares of some other cooperative societies in which assessee is a member and received dividend income from such member societies. The assessee claimed deduction of dividend income but the ld AO denied it. The assessee also pleaded that as dividend is received from member societies it is also not char ..... X X X X Extracts X X X X X X X X Extracts X X X X
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