9911796707
TMI Blog2022 (3) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... rds gratuity expenses is on actual payment basis, but not on provision made for gratuity expenses - AO as well as the CIT(A) were erred in disallowing gratuity expenses u/s. 43B of the Act. Hence, we direct the AO to delete the additions made towards gratuity expenses. Denial of MAT credit u/s. 115JB - AO denied the MAT credit, because of additions towards gratuity expenses and employees' contribution to PF ESI, the income declared by the assessee turned to be positive and hence, computed tax under normal provision of the Act and denied MAT credit - HELD THAT:- As assessee contended that since additions made by the AO towards employees' contribution to PF ESI has been deleted by the Ld. CIT(A) and further MAT credit relates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the reasons given by the AO to make disallowance towards subscription fee paid to club. We are inclined to uphold the findings of the Ld. CIT(A) and reject the ground taken by the assessee. - ITA Nos. 781 & 782/Chny/2020 - - - Dated:- 9-3-2022 - V. Durga Rao , Member ( J ) And G. Manjunatha , Member ( A ) For the Appellant : N. Arjunraj, CA for S. Sridhar , Adv For the Respondents : Sajit Kumar , JCIT ORDER Per G. Manjunatha , Accountant Member These two appeals filed by the assessee are directed against separate but identical orders of the Commissioner of Income Tax (Appeals)-1, Chennai, both dated 31.08.2020 28.08.2020 and pertains to assessment years 2017-18 2018-19 respectively. Since, the facts are ident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actual payment basis, but the Ld. CIT(A) has confirmed the additions made by the AO without appreciating the fact that the assessee has furnished necessary evidences including the ledger extract to prove that deduction claimed towards gratuity expenses is on actual payment basis but not a provision. The Ld. DR, on the other hand, supported the order of the Ld. CIT(A). 4. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The AO while processing the return filed by the assessee u/s. 143(1) of the Act, has made additions towards gratuity payment on the ground that the assessee has claimed deduction towards provision for gratuity. The assessee claims that deduction tow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ESI has been deleted by the Ld. CIT(A) and further MAT credit relates to disallowance of gratuity is consequential and hence suitable directions may be given to AO to verify and allow MAT credit in accordance with law. We find that MAT credit entitlement of the assessee is consequential and hence, we direct the AO to verify the entitlement of the assessee towards credit and allow credit, if any, after computing income as per provisions of Sec. 115JB of the Act and also under normal provisions of the Act. 6. In the result, the appeal filed by the assessee in ITA No. 781/Chny/2020 is allowed for statistical purposes. ITA No. 782/Chny/2020 for the AY 2018-19: 7. The only issue that came up for our consideration from the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to prove, as to how, subscription fee paid to club, is enhanced the business of the assessee and thus, there is no reason for the assessee to argue that it has been incurred for the purpose of business of the assessee. 9. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The Ld. AR for the assessee argued that adjustment made by the AO towards disallowance of subscription fee paid to club is not permissible u/s. 143(1)(a)(iv) of the Act. We find that as per Clause (iv) of Sec. 143(1)(a) of the Act, the AO can make adjustment towards expenditure indicated in the Audit Report, but not taken into account in computing the total income in the return. In this case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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