TaxTMI 
TaxTMI 
2026 (5) TMI 1126
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....), Income Tax Department, National Faceless Appeal Centre [CIT(A), ITD, NFAC] is bad both in the eye of law and on facts. 2. (i) On the facts and circumstances of the case the learned CIT(A), ITD, NFAC has erred both on facts and in law in confirming the disallowance of Rs. 15,49,151/- on account of gratuity payable to employees under section 40A(7) of the Act. (That the abovesaid disallowance has been confirmed despite the fact that the contribution has been made towards "approved gratuity fund" as defined under section 2(5) of the Income Tax Act, 1961 and hence cannot be disallowed as per the provisions of section 40A(7)(b) of the Act. 3. (i) On the facts and circumstances of the case the learned CIT(A), ITD, NFAC has erred both on facts and in law in confirming the disallowance of Rs. 1,83,30,058/- on account of non-deduction of TDS on the lease rental to Airport Authority of India under section 40(a)(ia) of the Act. (i) Without prejudice to the above and in the alternative, the learned CIT(A), ITD, NFAC has erred in ignoring the proviso to section 40(a)(ia) whereby the deductee having including the income in its return of income, the deductor....
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....3. Whether the Ld. CIT(A) was correct in deleting the disallowance of Rs.1,83,30,058/- u/s 40(a)(ia), even though the assessee deducted and deposited TDS only in the subsequent year, making the claim allowable in that subsequent year and not in the year under consideration? 4. Whether computing the book Ld. CIT(A) of erred in deleting the addition of Rs.83.85 lakh towards CSR expenditure while purposes and is profit U/s 115JB despite the fact that CSR is not incurred wholly for business disallowed under section 37? 4. The assessee has taken additional ground 8 with respect to validity of notice u/s 143(2), on account of not being issued in prescribed format, and ground no 9 with respect to the scope of limited scrutiny. The ld counsel of the assessee has not pressed these grounds. The same is therefore dismissed as not pressed. 5. Ground No. 2 of Assessee Appeal relates to disallowance made by AO of Rs. 15,49,151/- on account of gratuity payable to employees under section 40A(7) of the Act. In the present case the ld. AO has made the disallowance of Rs. 15,49,151/- on account of gratuity payable to employees under section 40A(7) of the Act stating that the same has b....
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....ai, 2023 (12) TMI 630, dated 25.10.2023 8. Per contra the ld DR relied on the orders of authorities below. 9. We have heard the rival submissions. We are of the considered view that the aforesaid gratuity debited to P & L Account is merely an adjustment against excess payment made to approved Gratuity Trust in earlier years. Alternately, the Gratuity Fund of the assessee is duly approved, hence amount debited in the said Fund is allowable u/s 40A(7)(b). Ground 2 is allowed. 10. Ground No. 3 of Assessee Appeal and Ground 3 of Revenue Appeal relates to disallowance of Rs. 1,83,30,058/- on the lease rental paid to Airport Authority of India on account of non-deduction of TDS u/s 40(a)(ia) of the Act. The ld AR submitted that the assessee has claimed the amount of Rs. 6,11,10,194/- on which TDS has not been deducted. The CIT(A), however, sustained the disallowance for the year under consideration but directed the Ld. AO to allow the corresponding deduction in the subsequent Assessment Year 2018-19, subject to verification and reconciliation of figures. Against the above, the assessee as well as the Revenue is in appeal before us, the assessee being aggrieved by sustenance of d....
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....OCHIN in the case of Apollo Tyres Ltd. v. DCIT, Circle -1(1), Range -1, 35 taxmann.com 593, dated 29-05-2013 * ITAT KOLKATA in the case of Jashojit Mukherjee v. ACIT, Circle- 50, Kolkata, 93 taxmann.com 366, dated 04.05.2018 * ITAT RAJKOT in the case of DCIT, Circle-1(2), Rajkot v. DML Exim (P.) Ltd., 118 taxmann.com 491, dated 28.07.2020 16. Per contra, the ld DR relied on the order of the AO. 17. We have heard the rival submissions. We find that high court of Uttarakhand, in the case of CIT v. Samsung Heavy Industries Company Ltd., referred to the decision of High Court of Kerala in the case of "Commissioner of Income Tax Vs. PVS Memorial Hospital Ltd.", reported in (2016) 380 ITR 284 (Kerala), which decided against the assessee on the issue that section 40(a)(ia) of the Act cannot be made applicable to short deduction of tax at source; and the decision of Hon'ble Calcutta High Court in the case of Commissioner of Income Tax Vs. S.K. Tekriwal, reported in [2014] 361 ITR 432 (Calcutta) which decided in favour of the Assessee. Thereafter, referring to the decision Hon'ble Supreme Court in the case of Commissioner of Income Tax Vs. Vegetable Products ....
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....strict the disallowance u/s 40(a)(ia) to the proportionate amount of the remaining short deducted amount. The addition made is sustained. The ground is dismissed. 20. Ground 5 of assessee and ground 2 of Revenue relates to adjustment relating to waiver of interest. During the course of assessment, the AO noticed that the assessee received an amount of Rs. 339.31 crore on account of interest waiver under the head Extraordinary/Exceptional income. The assessee deducted the same from its computation of income while computing the taxable income. The assessee explained that GOI has waived of interest of INR 339.31 crore on 1.12.2016 after prolonged and pending decision since 2001 (as per Note 29 of annual accounts) which were claimed as interest expenses in earlier assessment years. Such a claim of interest below the tables worked out to Rs. 173.39 crore which was disallowed in various assessment years, was claimed in current year computation of income under normal provisions of Income Tax Act. However, the entire interest income of Rs. 339.31 crore was offered for computing tax under MAT provisions as per 115JB in the last quarter of Dec 16/JAN. 21. Further, the assessee submitte....
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.... of figures by the AO as per the ITAT Delhi order. In the result, the ground is partially allowed. 23. Per contra, the ld DR relied on the order of AO. 24. We have heard the rival submissions and have perused the materials on record. It appears the issue of allowability of interest is still sub-judice before the hon'ble High Court. We however note that the CIT(A) has taken cognizance of the coordinate bench of ITAT which has allowed the assessee's appeal. In such facts and circumstances, we are the view that no interference is warranted with the decision of the CIT(A). Grounds of both the assessee as well as Revenue is accordingly dismissed. 25. Ground 6 of Assessee Appeal relates to adjustment of "Transition amount" as per section 115JB(2C), wrongly treated as 'prior period expense' by the AO. The Ld. AO, from the perusal of computation of income (PB Pg. 3-4), observed that the assessee had added back an amount of Rs. 6,67,02,980/- in the MAT computation treating the same as prior period expense, whereas no corresponding add-back was made in the normal computation of income. On this basis, the Ld. AO concluded that the assessee had left out the balance amount and accordin....
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....e expenditure of Rs. 60,25,19,888/- which, in the books of account prepared under Ind AS-16 / ICDS, stood capitalised as part of Property, Plant & Equipment. 31. The AO formed a view that since the assessee itself had capitalised such expenditure in its financial statements, the same could not be claimed as revenue expenditure under the Income-tax Act. Holding that the expenditure resulted in enhancement of asset value and future benefit, the AO treated the entire amount as capital in nature and added Rs. 60.25 crore to the income of the assessee. Aggrieved by the above addition, the assessee preferred an appeal before the Ld. CIT(A), who deleted the addition. Against this deletion, the Revenue is now in appeal before us. 32. Briefing on the facts, the ld AR submitted that the assessee had adopted component accounting in accordance with Ind AS-16 from FY 2016-17, whereby only significant components (above 8% of the asset cost) were capitalised in the books, while other routine repairs were charged to Profit & Loss Account. 33. We find that the Ld. CIT(A) observed that accounting treatment under the Companies Act / Ind AS / ICDS and tax treatment under the Income-tax Act op....