TaxTMI 
TaxTMI 
2009 (7) TMI 178
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....ginal assessment, medical expenses amounting to Rs. 15,04,407 were disallowed as follows: 1. Medical expenses-payment to unapproved hospitals 1,00,687 2. Medical reimbursement to clerical staff-Without medical bills 11,36,152 3. Reimbursement of hospitalization to clerical staff 2,67,568 --------- Total:  ....
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....bursed these expenses as per the terms of settlement with the employees union, signed on 30th March, 1991, as part of the Indian Banking Association; that such settlement was entered into so as to improve industrial relations and ensuring harmony with the employees union; that as per the terms of the settlement, the employees were entitled to claim reimbursement of medical expenses; that it was on the declaration given by the employees regarding having spent the money for medical treatment; that the assessee bank reimbursed the amount; that the expenses incurred out of commercial expediency and particularly expenses under a settlement contract is an allowable business expenditure as is well settled; that there is no dispute on the incurrence of the expenditure by the assessee; that there is no doubt regarding the genuineness of the expenditure incurred on employees as per the settlement; that there is no litigation..... of the expenditure having not been incurred for the assessee's business purposes; that non-deduction of TDS, if any, cannot result in disallowance for the employer; and that the reasonableness of the expenditure has to be seen from the businessman's point of view. ....
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.... Rs. 100 per day to Rs. 200 per day." 10. The learned counsel for the assessee has placed reliance on CIT vs. Kasturi Mills Ltd. (1998) 234 ITR 538 (Mad). Therein, it was held that the memorandum of settlement made it clear that the additional payment was not bonus and the distinction between the bonus payment and the additional payment was maintained throughout the agreement under which the composite payment was made to the employees; that the Tribunal found that the additional payment was made out of commercial expediency and once it was paid on the basis of commercial consideration, the sum paid was allowable under s. 37 of the Act. The learned counsel has further relied on CIT vs. Arcuttipore Tea Co. Ltd., (1992) 197 ITR 588 (Cal), wherein it has been held that the payment made as a result of a bipartite agreement over and above the minimum bonus payable under the payment of Bonus Act, 1965, to maintain industrial peace without which the business would have come to a standstill is a payment wholly, necessarily and exclusively laid out for the purposes of business and commercial expediency and is deductible as business expenditure under s. 37(1) of the IT Act, 1961. 11. In....
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....no reference if the provisions for bad debts were allowed to the extent allowable under s. 36(1)(viia) and the balance claim was disallowed or, alternatively, the entire provisions for bad debts as per the books of account were first added to the income and separate deduction as per s. 36(1)(viia) was allowed. It was therefore, that the AO decided that reversal of provision for bad debts/reversal of NPAs was taxable in the hands of the assessee. The addition of Rs. 1,02,49,536, as made in the original assessment order, was, therefore, maintained in the second round by the AO. 15. By virtue of the impugned order, the learned CIT(A), holding that the write back of the provisions for bad and doubtful debts of Rs. 102.49 lakhs, could not be subjected to tax as the assessee's income. Accordingly, the AO was directed to delete the addition of Rs. 102.49 lakhs. 16. While challenging the impugned order, the learned Departmental Representative has sought to place staunch reliance on the order passed by the AO. The observations made by the AO have been reiterated before us. 17. The learned counsel for the assessee, on the other hand, has relied on the impugned order. In this regard,....
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....eduction which is allowed on certain percentage of advances or total income assessed, on an ad hoc basis. This, obviously, cannot be linked with any specific amount of provision for bad and doubtful debts written back. Therefore too, we do not find any error in the order of the learned CIT(A). The reasoning evinced by the learned CIT(A) is entirely in accord with the law. Still further, it is trite that unilateral entries in the books of account concerning write back provisions of bad and doubtful debts cannot amount to recovery of any due or any part thereof. As such, the same is not taxable. 19. In view of the above, finding no merit in the grievance raised by the Department, this grievance is rejected. 20. In the result, the appeal filed by the Department is dismissed. ITA No. 1249/Cal/1997: 21. This is assessee's appeal for asst. yr. 1993-94. The effective grounds raised by the assessee are as under: "1. For that on facts and in the circumstances of the appellant's case, the learned CIT(A) has erred in confirming the adjustments of Rs. 4,45,499 in the income returned by the assessee under s. 143(1)(a) of the IT Act, 1961 ignoring the provisions of art. 7(3) of th....
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....p; 2,500 -------- 4,45,499 -------- 24. Article 7(3) of the DTAA betweenIndiaandJapanreads as follows: "3. In determining the profit....