TaxTMI 
TaxTMI 
2023 (9) TMI 906
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....ncome for A.Y. 2018-19 on 29.04.2022 declaring total income at Rs. 94,69,38,530/-. The case was selected for scrutiny and accordingly notices u/s 143(2) & 142(1) were issued and served on the assessee. AO noticed that assessee had entered into International Transactions with its Associates Enterprises (AE). A reference was made by the AO to TPO u/s 92CA for determination of Arm's Length Price in respect of International Transactions. TPO vide order passed u/s 92CA(3) dated 29.07.2021 proposed an adjustment of Rs. 1,58,97,397/- to the International Transactions entered into by the assessee. Thereafter, a draft assessment order was passed u/s 144C of the Act vide order dated 22.09.2021 wherein the total assessable income was determined at Rs. 97,99,20,622/-. As per as the provision of Section 144C(2) of the Act, assessee was granted a period of 30 days to either file its acceptance of the variation to the AO or to file its objection, if any, to such variation with the DRP and AO. Assessee filed its objection to the draft assessment order before DRP. DRP vide directions issued u/s 144C(5) of the Act dated 29.03.2022 directed the AO to complete the assessment as per the directions cont....
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....es' contribution to PF can be claimed as an expense in the year in which it is incurred if the actual payment is made before the due date of filing the ROI under section 139 of the Act, and thereby ignoring the principle of judicial discipline. 2.5 The Ld. AO/ Ld. DRP erred in incorrectly interpreting the clarification provided by the Central Board of Direct Taxes ('CBDT') vide Circular No. 22/2015 dated 17 December 2015. 2.6 The Ld. AO/ Ld. DRP erred in construing that the Explanations inserted in sections 36(1)(va) and 43B of the Act vide Finance Act, 2021 are clarificatory in nature and are applicable' retrospectively. 3. The Ld. AO erred in denying the credit of buy back tax amounting to INR 18,356,916 deposited by the Appellant as per section 115QA of the Act vide challan dated 29 September 2017 and incorrectly levying a consequential interest of INR 10,096,304 under section 115QB of the Act. 4. The Ld. AO erred in ignoring the provisions of Income Computation Disclosure Standards ('ICDS') IV (Revenue recognition) while computing the tax payable on assessed income by making addition f of interest on refund of income tax amounting to ....
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....nds is not an allowable deduction. AO after placing reliance on the amendments made by Finance Bill, 2021, made the additions. When the matter was carried before the DRP, DRP upheld the action of AO. Consequent to the direction of DRP, AO made the addition. Aggrieved by the order of AO, assessee is now before us. 5. Before us, Learned AR reiterated the submissions made before AO and DRP and further pointed to the copy of the Challan of deposit of employees' PF which is placed at page 1 of the paper book and from that, he pointed that the online Challan was generated on 10th July 2017, the amount was paid through cheque and is reflected in the bank's statement (copy of which is placed at page 3 of the paper book) but however due to the technical glitches at the end of the Provident Fund portal, the amount of deposit was reversed on July 15, 2017 but was finally paid on July 18, 2017. He pointed to the similar factual position with respect to the other month's payments for which he pointed to the copy of the challan, bank statements which are placed at page 1 to 77 of the paper book. He thereafter, pointed to the copies of letter filed before the Employees Provident Fund Organizat....
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....e disallowed and the balance addition be deleted. 6. Learned DR on the other hand supported the order of lower authorities and objected to the additional evidences filed but however stated that if the additional evidences are admitted, the same be sent back to lower authorities for necessary verification. 7. We have heard the rival submissions and perused the material available on record. The issue in the present ground is with respect to the addition made on account of the delayed deposit of Employees' Contribution to PF and Labour Welfare Fund. AO had disallowed Rs. 1,70,84,695/-, being delayed deposit of PF and other employees dues by invoking the provisions of Section 36(1)(va) r.w.s 2(24)(x) of the Act. Before us, it is the contention of the Learned AR that out of the total amount of Rs. 1,70,84,695/-, there was delay in deposit of Rs. 171,351/- and therefore the same needs to be disallowed in view of the Hon'ble Apex Court decision in the case of Checkmate Services P. Ltd. (supra). Considering the submissions of Learned AR and relying on the decision of Hon'ble Apex Court in the case of Checkmate (supra) to the extent of disallowance of Rs. 1,71,351/-, the order of AO i....
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....o have been made on the date on which it was handed over to the Government bankers. We note that though the aforesaid circular is with respect to date of receipt of cheque tendered for payment of direct taxes but however are of the view that the principle stated in the aforesaid circular will be applicable to the present facts also. Considering the totality of the aforesaid facts and more so the additional evidences which have been filed by the assessee before us, we are of the view that the issued needs to be re-examined at the end of the AO. We therefore, restore the issue back to the file of AO to decide the issue afresh after considering the submissions of the assessee. If after examination of the additional evidences and the assessee's submissions, the assessee's contentions of the initial deposits being made before the due date prescribed by PF authorities and contention of the payment being reversed on account of the glitches at the end of the EPFO is found correct, then the AO shall delete such additions. Thus the ground of assessee is partly allowed for statistical purposes. 9. Ground No.3 is with respect to the denial of the credit of buy back tax deposited by the asse....
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....t from the income under the head "income from other sources". He submitted that CBDT has issued certain Income Computation and Disclosure Standards ('ICDS'), in exercise of the powers conferred by Section 145(2) of the Act which provides a framework for computation of taxable income of all assesses in relation to the income under heads "Profits and Gains under Business or Profession" and "Income from Other Sources". He submitted that as per the recognition criteria laid down by this ICDS, interest on refund of Income-tax should be offered to tax by the assessee only on actual receipt basis. He submitted that the treatment followed by the assessee is in line with the treatment provided by ICDS. He submitted that since the interest on Income-tax refund was actually received by the assessee during the F.Y. 2020-21, it was offered to tax in F.Y. 2020-21 relevant to A.Y. 2021-22. In support of his aforesaid contentions, he pointed to the computation of income which is placed at page 104 to 107 of the paper book. He therefore, submitted that the same amount of interest has been taxed twice once in A.Y. 2018-19 on accrual basis and once in A.Y. 2021-22 on receipt basis. He submitted that ....