AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (8) TMI 46
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....8,589/-. 2. The CIT(A), Lucknow has erred in law and on facts in deleting the addition of Rs. 243288508/- on account of prior period expenses ignoring the fact that the assessee is following mercantile system of accounting and only those prior period expenses which crystallized during the year can be claimed. 3. The CIT(A), Lucknow has erred in law and on facts in deleting the addition of Rs. 19,34,458/- on account of interest on unlisted machinery without appreciating the fact that the assessee deducted the amount twice i.e. first in P/L account and then in computation of income. 4. The CIT(A), Lucknow has erred in law and on facts in deleting the addition of Rs. 16,38,98,000/- on account of interest on "Clients Interest Account" without appreciating the fact that assessee is claiming TDS relating to FDRs of un-utilized funds but is not showing the interest income of FDRs in its income which is against provisions of section 198 and 199 of the I.T.Act, 1961. 5. The CIT(A), Lucknow has erred in law and on facts in deleting the addition of Rs. 2,41,64,170/- by observing that depreciation has been correctly claimed by the....
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....omputation of income. 3.3 Arguing ground No. 5, Learned D. R. submitted that CIT(A) has wrongly held that assessee has correctly claimed depreciation to the extent of Rs. 2,41,64,170/- ignoring the fact that the assessee can claim depreciation on assets as per section 32 of the Act but the assessee did not furnish depreciation chart showing details of assets during the course of assessment proceedings. 3.4 Arguing ground No. 6, Learned D. R. submitted that CIT(A) has wrongly allowed relief to the assessee on account of deletion of addition which the Assessing Officer had made on account of provision for gratuity after admitting fresh evidence in the form of detailed gratuity chart ignoring the legal provision as contained in Rule 46A of the I.T. Rules. 4. Learned A. R., in his response to ground No. 1, invited our attention to the detailed written submissions placed at pages 1 to 12 of the paper book and submitted that during the course of assessment proceedings the assessee explained the contract expenses pertaining to Dr. B. R. Ambedkar Hospital, Noida, which were wrongly clubbed with lab expenses and which were accepted by the Assessing Officer also but he made notional....
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....ed D. R. to state that depreciation was not correctly claimed by the assessee. Our attention was invited to the copy of computation chart, placed at pages 18 to 28, where the assessee has added back depreciation amounting to Rs. 7,31,66,085/- on its own and had claimed the depreciation which was allowable to the assessee as per the provisions of section 32 of the Act. Our attention was invited to the findings of learned CIT(A) wherein he has noted these facts. 4.5 Now coming to last ground, Learned A. R. submitted that no fresh evidence was submitted. The chart claimed to have been filed, as additional evidence, is nothing but figures from the earlier records of the Assessing Officer relating to earlier years, which was already available with the Assessing Officer. He submitted that in the chart the Learned CIT(A) has only reproduced the figures of gratuity written back in the computation of earlier years therefore, it was prayed that CIT(A) has rightly allowed relief to the assessee. 4.6 Arguing appeal in I.T.A. No.318, Learned A. R. submitted that there was only one issue raised by the assessee which relates to addition on account of labour cess and ....
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....vered along with 15% profit thereon, resulting in no loss of profit or loss to the Revenue in the form of tax. the ld. CIT(A) has confirmed the disallowance, holding that this disallowance was correctly made by invoking the provisions of section 43B of the Act. It remains undisputed that the labour cess is part of the contract account. That being so, the assessee is correct in contending that the addition, if any, is maintainable only in the hands of the client of the assessee Corporation and not in the hands of the assessee. The provisions made for labour cess, do not stand debited to the profit & loss account and the profitability of the Corporation in the form of centage earned as gross profit, is not affected. The assessee Corporation is only a collecting agency for the purposes of the labour cess and deposit thereof with the Government account. Thus, the action of the ld. CIT(A) in confirming the addition for the provisions for labour cess, is reversed and the addition is deleted. The sole ground raised by the assessee in its appeal is allowed." 6.1 Respectfully following the aforesaid order of the Tribunal in assessee'....
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....the findings of the Assessing Officer and the submissions of the appellant. I find that the expenditure disallowed by the AO consists of Rs. 19,01,616/- paid to M/s Dakshinanchal Vidyut Vitran Nigam Limited, Agra against the bill raised by the Electricity Distribution Division, Etawah and the balance amount of Rs. 4,52,619/- is on account of payment made to the M/s U.P. State Bridge Corporation Limited. The AO disallowed the expenses stating that these do not relate to the year under consideration whereas the appellant claims that the liability arose in the year under consideration. Alternatively, the appellant claims that the amount pertains to contract account and therefore in case the addition is made then simultaneously, the work in progress should be reduced by like amount. 10(5) I find that the appellant has clearly brought out the fact that the bills were raised by the Electricity department on 30.10.2009, which means that the liability has arisen in the current year and therefore the expenses are allowable in the assessment year under consideration. Notwithstanding, the claim of the appellant that any addition made will result in reduction of work in progress is ju....
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....rightly allowed relief to the assessee. In view of the above, ground No. 3 of the Revenue is dismissed. 12. Now coming to ground No. 4. We find that the addition was made by the Assessing Officer on account of interest on client's fund account. This issue has also been dealt with by the Tribunal in assessment year 2010-11. The findings of the Tribunal, as contained in para 39 to 41 at pages 29 & 30, are reproduced below: "39. The A.O made the addition of Rs. 39,46,18,444/- being interest on client fund as income of the assessee, without appreciating the Government Order that interest on client funds is to be added in client fund. 40. The ld. CIT(A) deleted the addition, observing, as below:- "12(4) I have examined the facts and circumstances of the case. I have examined the findings of the Assessing Officer and the submissions of the appellant. I find that the amount of Rs. 39,46,18,444/- shown in the balance sheet as interest accrued on deposits is the running balance of accrued interest on the funds of the clients of the appellant. This amount is inclusive of opening balance not received during the year as wel....
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.... no.4 of the Revenue's appeal is dismissed. 13. Coming to ground No. 5, we find that Assessing Officer had made addition of Rs. 2,41,64,170/- by disallowing the depreciation on unlisted assets. The Learned CIT(A) has allowed relief to the assessee by holding as under: "10(4) I have examined the facts and circumstances of the case. I have examined the findings of the Assessing Officer and the submissions of the appellant. I find that the appellant claims depreciation in Contract account as well as in the profit and loss account. Depreciation of Rs. 2,41,64,170/- added by the AO has been claimed in the contract account and depreciation of Rs. 4,90,01,915/- has been claimed in the profit and loss account. In the computation of income the appellant has written back an amount of Rs. 7,31,66,085/- (Rs. 2,41,64,170/- + Rs. 4,90,01,915/-) and has claimed depreciation as per Income Tax Rules at applicable rates of Rs. 6,68,81,726/-. There is therefore no justification in the addition made by the AO as the correct depreciation has been claimed by the appellant as per Rules after adding back the depreciation debited to the contract account and profit and loss account.&....