AI Drafter 
TaxTMI 
TaxTMI 
2022 (10) TMI 220
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.... arbitrary and erroneous and bad, both in the eye of law and on facts. b. That the assessee having already added sum of Rs.34,581/- u/s. 14A of the Act in the computation of income (returned income), Rule 8D is not applicable and the sustaining of the addition of Rs. 2,01,724/- u/s.l4A of the Act is unjustified, arbitrary, contrary to facts, erroneous and bad in law. c. The appellant's computation of the aforesaid Rs.34,581/- u/s. 14A of the Act is based on its books of accounts and is worked out in a reasonable and fair manner, the learned lower authorities have mis appreciated/misconstrued the same and the disallowance U/S.14A of the Act is incorrect, arbitrary, erroneous and bad in law. d. That the learned CIT(Appeals) holding that the aforesaid Rs.34,581/- has no reasonable basis is incorrect, contrary to facts, arbitrary and erroneous and bad, both in the eye of law and on facts. 3. Disallowance under 'Deduction on Audit Fees - Rs. 15,00,000/- a. That the learned CIT (Appeals) has misconstrued/mis-appreciated the facts and the confirming of disallowance of Rs. 15,00,000/- under audit fees is contrary to facts, arbitrary, err....
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....rovisions (Pay arrears)-Rs.1,63,26,134/- a. That on the facts and in the circumstances the case, the order of the learned CIT (Appeals) in confirming the disallowance of Rs.l,63,26,134/- Under 'Other provisions relating to estimated Liability towards staff and sub-staff for pay revision and arrears as per 9th Bipartite and per-Court orders is contrary to facts, arbitrary, erroneous and bad, both in the eye of law and on facts. b. That on the facts and in the circumstances of the case, the assessee having made a fair estimate of Liability towards staff and sub-staff for pay revision and arrears as per 9th Bipartite and per-Court orders, the sustaining of the addition/ disallowance of Rs.1,63,26,134/- is unjustified, arbitrary, contrary to facts, excessive, erroneous and bad in law. 6. Enhancement and Addition under "Other provisions" - Rs.1,44,77,000/- a. That on the facts and in the circumstances of the case, the order of the learned CIT(Appeals) dated 03.11.2017 in making addition of Rs. 1,44,77,000/- under "Other provisions" by enhancing the assessments is contrary to facts, against the principles of natural justice, arbitrary, excessive, e....
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..... 80P of the IT Act is not admissible is contrary to facts and the express provisions of law, arbitrary, erroneous, bad in law and legally untenable. d. That the assessee does not fall under the purview of Section 80P(4) of the I.T.Act and therefore the denial of claim of deduction u/s.80P of the I.T Act by the lower authorities is arbitrary, erroneous, bad, both in the eye of law and on facts and legally untenable. e. That the CBDT Circular relied on by the learned CIT(Appeals) is contrary to the express provisions of law and cannot be applied in the assessee's case. f. Without prejudice to Ground (e) above, in any case, CBDT Circular is neither binding on the assessee nor on the appellate authority ought not be applied in the case of the assessee. 8. Without prejudice to Ground (2) to (7) above, in any case, even after making the disallowances, the deduction u/s.80P of the Act ought to have been to that extent and accordingly, the 'NIL' total income as per returns of the assessee ought to be accepted. 9. That the appellant craves leave to add, supplement, modify the grounds herein-in-above before or at the time of hearing o....
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....e assessment order. It was submitted that before the due date of filing of return the assessee has already paid Rs.16,17,336/-. It was the submission that this provision made itself was low. It was the prayer that the addition as made by the AO and as confirmed by the CIT(A) is liable to be deleted. 4.2 In reply, ld. CIT-DR submitted that this is only a provision and the provision is not allowable as an expenditure. It was the submission that the order of the ld. CIT(A) and that of the AO is liable to be upheld. 4.4 We have considered the rival submission. 4.5 As it is noticed that the assessee has paid the audit fees of Rs.16,17,336/- before the due date of filing of the return and it has also been recognised by the AO in the assessment order, we are of view that the addition of Rs.15 lakhs made on the ground that it is a provision, is not called for. In the circumstances, the addition made by the AO and as confirmed by the CIT(A) under the head Deduction on Audit Fees stands deleted. 5. Ground No.4 is with regard to the disallowance on contribution to the recognised Gratuity Fund of Rs.1,21,62,000/-. 5.1 It was submitted by the ld. AR that the assessee had made a p....
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.... [2000] 245 ITR (SC), no disallowance was called for in the hands of the assessee. 6.2 In reply, ld. CIT-DR submitted that this is only a provision and as it was a provision no allowance of the same was liable to be done. It was submitted that the amount has not been crystalysed. It was further submission that no evidence has been produced to show that the amounts have been paid to the employees. 6.3 We have considered the rival submissions. 6.4 As it is noticed that the computation of the revision of pay has been made by the assessee for 31 months and the same has been accepted by the AO for a period of 27 months, obviously the computation is on scientific basis, it is not an unascertained liability. The liability has crystalised. In these circumstances, in line with the principle laid down by the Hon'ble Supreme Court in the case of Bharat Earth Movers Ltd. (supra), the disallowance of the provisions for pay arrears as made by the AO and as confirmed by the CIT(A) stands deleted. 7. Ground No.6, is with regard to enhancement and addition under the head other provisions to an extent of Rs.1,44,77,000/-. 7.1 It was submitted that this amount consisted of two figures,....
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....fact, on the demise of an employee attempt is made to mitigate the financial loss to the family of employee at the earliest. This is but a social responsibility. Therefore, it cannot be said that this amount has not been crystalised nor can it be said that it is liable to be allowed only in the year of payment. This being so, in view of the provision of the Hon'ble Supreme Court in the case of Bharat Earth Movers Ltd. (supra) as the amount has been crystalised, we are of the view that the said amount is an allowable expenses. Thus, the addition as made by the ld. CIT(A) for enhancement of provision with regard to ex-gratia to the deceased employee for the relevant assessment year stands deleted. 7.6 Coming to the issue of provision for fraud, at the outset, it is noticed that the said amount is not crystalised in any manner whatsoever. The provision is made on the basis of allegation. This allegations needs to be verified. It needs to be proved. An attempt for recovery must be made from the persons, who have committed the fraud. Where the fraud amount is recovered is not known. Obviously, it cannot be said that the liability is crystalised. In these circumstances, in respect of ....
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.... 2008-09, wherein, it has been held that the RRBs are not entitled to deduction u/s.80P of the Act from the assessment year 2007-08. Whereas the assessment year involved in the present case is 2012-13. 8. However, ld A.R. of the assessee relied on various judicial decisions particularly in the case of Pandiyan Grama Bank vs ACIT in ITA No,1941/Mad/2009 for the assessment year 2007-08 order dated 13.8.2010, wherein, the contention of the assessee was accepted that it is to be treated as co-operative society in view of the provisions contained in RRB Act, 1976 and the Tribunal decided the issue in the context of revision proceedings u/s.263 of the Act and the decision was prior to issue of CBDT circular No.6/2010 dated 20.9.2010. 9. We find that Section 80P(4) debar any co-operative bank other than a primary agricultural society or a primary co-operative agricultural and rural development bank from the provisions of section 80-P which allows deduction to a co-operative society. The Co-operative bank has been defined under the Explanation to section 80P(4) of the Act. 9. Further, the CIT(A) has relied on the decision of Indore Bench of the Tribunal in the ca....