TaxTMI 
TaxTMI 
2018 (1) TMI 243
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....hat arise for consideration in these three appeals are identical and arise out of the same facts and circumstances. These appeals are heard together. We deem it convenient to pass a common order. ITA No.1538/Kol/2014 (A.Y.2004-05) 2. Ground No.1 raised by the revenue reads as follows :- "1. That on the facts and circumstances of the case, the ld. CIT(A) is not justified in deleting disallowance of Rs. 3,17,638/- on contribution to Staff Welfare Fund. This fund was created without passing the same through the Profit & loss Account. The assessee actually understated service charge income and resultant cash was directly credited to this fund. 3. There is a delay of 19 days in filing ITA No.1538 and 1539/Kol/2014 and delay of two days in ....
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....or the following reasons :- "3. During the course of investigation of accounts, it was found' that the assessee company created two funds in the names of 'Staff Welfare Fund' and 'Breakage Compensation Fund'. The assessee treated the said funds as current liability. These funds were created without passing the same through the Profit & Loss Account. Amounts credited directly to these funds and kept the under 'Current Liability' were as below ; . Staff Welfare Fund (10%) Rs.. 3,17,638/- Breakage Compensation Fund (9%) : Rs.2,85,871/- Rs. 6,03,509/- Point no. IX of notes on accounts states that these two funds were created by respectively crediting into it 10% and 9% of the service charges earned ....
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....Staff Welfare Fund. The relevant portion of the order of ITAT is re-produced as under :- "On careful consideration of the materials made available with the Tribunal and analyzing the same in the light of the rival submissions of both the parties, it is found that the assessee maintains staff welfare fund a/c copy of which is made available before the Tribunal which shows that the service charges received by the assessee were accounted to the Staff Welfare Fund and they were accordingly distributed to the staff and this very procedure is followed by the assessee basing on the Minutes of Board of Directors of West Bengal Tourism Development & Corpn. held on 5-12-79 a copy of which is also made available before the tribunal but at the same ....
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....received and consequently there was a diversion of income by over riding title at source on the service charges received by the assessee. The CIT(A) has followed the order of ITAT on identical facts . In view of the above, we find no grounds to interfere with the order of CIT(A). Ground no.1 raised by the revenue is accordingly dismissed. 8. Ground No.2 raised by the revenue reads as follows :- "2. That on the facts and circumstances of the case, the ld. CIT(A) is not justified in directing the A.O. to verify the claim of the assessee in respect of a carry forward of losses for A.Y. 1995-96 i) unabsorbed depreciation of Rs. 1,70,56,577/-, ii) Business loss of Rs. 1,45,62,730/- and b) Dividend income of Rs. 7,25,760/- as exempt income u/s....
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..... 11. In the result ITA No. 1538/Kol/2014 is partly allowed for statistical purposes. ITA Nos.1539/Kol/2014 and ITA No.1540/Kol/2014 (A.Y.2005-06 & 2008-09) 12. Grounds of appeal raised by the revenue read as follows : A.Y.2005-06 "1. That on the facts and circumstances of the case, the ld. CIT(A) is not justified in deleting disallowance of Rs. 3,39,328/- on contribution to Staff Welfare Fund. These expenses were not actual expenses, only provisions were created. 2. That on the facts and circumstances of the case, the ld. CIT(A) is not justified in directing the A.O. to verify the claim of the assessee in respect of a) carry forward of losses for A.Y. 1995-96 i) unabsorbed depreciation of Rs. 1,70,56,577/-, ii) Business loss of....