TaxTMI 
TaxTMI 
2023 (8) TMI 1616
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....s not generating any Revenue" 3. "Whether, on facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in deleting addition of Rs. 7,52,685/- made u/s 36(1)(vii) of the Act as the assessee has not proved its sincere efforts to recover the bad debts." 4. "Whether, on facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance of Rs. 26,409/- made by the Assessing Officer for delayed payment of provident fund and ESI, by holding that these payment were made by the assessee before filing of return replying on the judgment of jurisdiction High Court given in the case of CIT vs. AIMIL. Ltd. without appreciating the judgment given by the Hon'ble High Court in the case of M/s. Unifac Management Services India Pvt. Ltd. vs. The Deputy Commissioner of Income Tax, Cooperation Circle- 3(2), WP No. 5264 of 2018 (Madras), CIT-2, vs. Gujrat State Road Transport Cooperation (2014) 366 ITR 170 (Guj) and CTT vs. Merchem Ltd. (2015) 280 CTR 381 (Kerala) and CBDT's Circular No. 22/2015 dated 17.12.2015." 5. "The appellant craves, leave or reserving the right to amend, modify, alter, add or fo....
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.... shall pay lease rental to the lesser, a security deposit & subsistence amount to PBC. The subsistence amount has been identified in clause 1.1 as the cost incurred by PBC for the performance, execution & implementation of the business centre arrangement & the business centre facilities arrangement including the rent, salaries payable to PBC staff, payment to service provider, overheads, consumables etc. less the user fee received by PBC from the users. This definition itself shows that the agreement was entered on the premise that the expenditure would exceed the user fee collected. The termination clause of the agreement requires the company to restore the property to the same condition as it was prior to the lease agreement. Based on a technical evaluation carried out by a firm of Architects, the estimated cost of restoring the property to its original condition at the time of termination of lease agreement is Rs. 79,20,740/-. The fact that almost the entire expenses of UK India Business Council barring a few have been made to PBC or its related entities controlled by the common directors payment of exorbitant sums to PBC; hiring Mayaland as recruitment agency, when the business....
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....und favour of the Revenue. The Hon'ble Supreme Court in the case of SA builders Ltd. Vs. CIT(A) (2007) 288 ITR 1 (S.C) held as under:- "We agree with the view taken by the Delhi High Court in CIT vs. Dalmia Cement (Bhart) Ltd. (2002) 254 ITR 377 that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), the Revenue cannot justifiably claim to put itself in the arm-chair of the businessman or in the position of the board of directors and assume the role to decide how much is reasonable expenditure having regard to the circumstances of the case. No businessman can be compelled to maximize its profit. The income tax authorities must put themselves in the shoes of the assessee and see how a prudent businessman would act. The authorities must not look at the matter from their own view point but that of a prudent businessman. As already stated above, we have to see the transfer of the borrowed funds to a sister concern from the point of view of commercial expediency and not from the point of view whether the amount was advanced for earning profits." 9. Furthe....
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.... to be drawn. In-fact, the nature of the expense which inter alia includes expenses like repair and maintenance has not been found to be capital in nature, whereas travelling expenditure cannot be held to be capital expenditure. In view of the above, we find no merit in Ground No. 2 of the Revenue and find no error or infirmity in the order of the CIT(A) in deleting the said addition. Accordingly, Ground No. 2 of the Revenue is dismissed. GROUND NO. 3 14. Ground No. 3 is regarding disallowance of expenses claimed as Bad Debts of Rs. 7,52,685/- made by the A.O. on the ground that the assessee could not produce any documentary evidence to show that the amount became Bad Debts and added the same to the income of the assessee in terms of Section 36(1)(vii) of the Act. It is the case of the assessee that the amount of Rs. 7,52,685/- could not be recovered from "I Love British and claimed as Bad Debts. The assessee had provided services of "I Love British" for the Financial Year 2013-14, in which the same was considered as revenue and amount recoverable as Sundry Creditors. However, company had made full effort to recover the amount and sent various communications for such recovery....
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....t was on the statute book, was only employer's contribution (Section 34(1)(iv)). At that point in time, there was no question of employee's contribution being considered as part of the employer's earning. On the application of the original principles of law it could have been treated only as receipts not amounting to income. When Parliament introduced the amendments in 1988-89, inserting Section 36(1)(va) and simultaneously inserting the second proviso of Section 43B, its intention was not to treat the disparate nature of the amounts, similarly. As discussed previously, the memorandum introducing the Finance Bill clearly stated that the provisions - especially second proviso to Section 43B - was introduced to ensure timely payments were made by the employer to the concerned fund (EPF, ESI, etc.) and avoid the mischief of employers retaining amounts for long periods. That Parliament intended to retain the separate character of these two amounts, is evident from the use of different language. Section 2(24)(x) too, deems amount received from the employees (whether the amount is received from the employee or by way of deduction authorized by the statute) as income - it is the character....
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....e borne while interpreting the obligation of every assessee under Section 43B. 54. In the opinion of this Court, the reasoning in the impugned judgment that the non-obstante clause would not in any manner dilute or override the employer's obligation to deposit the amounts retained by it or deducted by it from the employee's income, unless the condition that it is deposited on or before the due date, is correct and justified. The non-obstante clause has to be understood in the context of the entire provision of Section 43B which is to ensure timely payment before the returns are filed, of certain liabilities which are to be borne by the assessee in the form of tax, interest payment and other statutory liability. In the case of these liabilities, what constitutes the due date is defined by the statute. Nevertheless, the assessee's are given some leeway in that as long as deposits are made beyond the due date, but before the date of filing the return, the deduction is allowed. That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees' contributions- which are deducted from their income. They are not part of the assessee empl....