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TMI Blog2025 (4) TMI 1438X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(1) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') dated 17.09.2020 for AY 2019-20 and 13.04.2023 by the Assessing Officer, CPC, Bengaluru for AY 2022-23 (hereinafter referred to as 'ld. AO'). Both the appeals were heard together and hence, they are disposed off by this common order for the sake of convenience. ITA No. 2043/Del/2024- AY 2019-20 2. The Ground No. 1 raised by the assessee is general in nature and does not require any specific adjudication. 3. Ground No. 2 raised by the assessee is challenging the confirmation of disallowance of labour expenses made u/s 36(1)(va) of the Act in the sum of Rs. 3,66,830/- on account of employee's contribution to the Labour Welfare Fund. 4. We have heard the rival submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said due dates were beyond the due date of filing of income tax return u/s 139(1) of the Act. Hence, the ld CPC, Bengaluru while processing the return had erroneously construed this employees' contribution to have not been remitted within the due date prescribed under the respective Labour Act and made addition u/s 36(1)(va) of the Act in the sum of Rs. 3,66,830/- which was also confirmed by the assessee ld CIT(A). We find that in view of section 9 of Haryana Labour Welfare Board Act, the labour welfare fund dues of Rs 3,66,830/- in the instant case had been duly remitted within the respective dates prescribed under the Labour Laws. Hence, the decision of Hon'ble Supreme Court in the case of Checkmate Services in Civil Appeal No. 283 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with this fact that there was indeed double addition. Hence, we direct the ld AO to delete the addition of Rs. 29,20,974/- towards employees' contribution to ESI. Accordingly, ground No. 3 raised by the assessee is allowed. 7. Ground No. 4 raised by the assessee is challenging the confirmation of action of the ld AO in making an upward adjustment of Rs. 18,85,57,096/- on account of inconsistency between amount reported in the tax audit report and the deduction claimed in the income tax return towards gratuity component and other comprehensive income. 8. We have heard the rival submissions and perused the material available on record. The Company has prepared its books of accounts for the year under consideration as per the requirements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed the balance payment of Rs. 18,85,57,096, as allowable deduction, routed through OCI, in accordance with the provisions of the section 43B of the Act. The same has also been put on record by the assessee vide its response filed on July 7, 2020 (under S. No. 2 - Incorrect Claim u/s 143(1)(a)(ii)) on the e-filing portal of the income-tax department, against the notice dated June 9, 2020 issued under section 143(1)(a) of the Act. Accordingly, the disallowance considered by the CPC in the intimation order issued, of the aforesaid OCI component of gratuity expense, amounting to Rs. 18,85,57,096, is an expenditure which the assessee has rightly claimed as deduction under section 43B of the Act and therefore, the said adjustment made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same in AY 2017-18. The copy of the said CIT(A) order dated 12.07.2023 for AY 2017-18 is enclosed in page 340 of the Paper Book. The relevant observation of the ld CIT(A) in para 4.5 of his order where these issues were deleted by the ld CIT(A) is enclosed in pages 356 to 357 of the Paper Book for AY 2017-18. It is pertinent to note that the ld CIT(A) while addressing this issue for the year under consideration had erroneously looked at clause 26(i)(A)(a) in Form 3CD instead of clause 26(i)(B)(a) which had lead the ld NFAC to arrive at the conclusion. Accordingly, ground No. 4 raised by the assessee is allowed. 11. Ground No. 5 raised by the assessee in challenging the chargeability of interest u/s 234C of the Act. The law is very well s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.35 crores and Rs. 0.15 crores are reflected in Form 26AS in pages 118 and 123 of the Paper Book. Since the entire transactions of the amalgamating entities are reflected in the hands of the assessee, credit for advance tax paid by the amalgamating entity should be given to the assessee. We direct the ld AO accordingly and allow Ground No. 4 raised by the assessee. 18. Ground No. 5 raised by the assessee seeking TDS credit for the very same reason as in ground No. 4. We direct the ld AO to grant TDS credit of amalgamating entities to the assessee. Accordingly, Ground No. 5 raised by the assessee is allowed. 19. Ground No. 6 raised by the assessee is challenging the levy of interest u/s 234B of the Act is consequential in nature. With re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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