Case Law Details
Brief of the case:
1.Assessee would be allowed deduction of payment of employees contribution of ESI and PF if it paid the same before the due date of filing of return u/s 139(1).
2. Pooja & Temple expenses would be allowed as a business expenditure because it was related with the harmony of business so business expenditure.
3.Cess on green leaf is a business expenditure so allowed as a business expenditure.
4.TDS would not be required to deducted u/s 195 if the payment had been made to foreign agent who was not having any permanent establishment in India.
5. Wealth tax would be deducted for the calculation of book profits u/s 115JB after relying on the case of Usha Martin Industries Ltd. Vs. CIT (2003) 81 TTJ 158 (Cal).
6. Bad debts would be allowed as a deduction if the same had been debited to profit & Loss account.AO could not question the genuineness of the bad debts.
7.Nursery expenses would be allowed as a revenue expense not capital expense.
8.Donations made in the business would be allowed as a expense subject to the verification of certificates.
9.TDS / Advance Tax credit would be allowed to the assesse even though the same were not reflecting in form 26AS provided the same were verified with deposit challans of the same.
Facts of the case:
1.Assessee had paid the dues of PF & ESI after the due dates mentioned under the respective acts but before the due date of filing return mentioned u/s 139(1) i.e fulfilling the conditions of sec 43B.
2.Assessee had claimed pooja expenses and temple expenses as a business expenses but AO disallowed the same.
3. Assessee had considered the cess on green leaf as a revenue expense but AO considered the same to be capital expenses.
4.Assessee had not deducted TDS on payment made to foreign agent because the agent was not having any permanent establishment in India.
5.Assessee had deducted wealth tax for calculating book profits u/s 115JB but AO was of view that it should not be deducted .
6. Assessee had claimed debts in the profit & Loss account but AO disallowed the same.
7. Assessee claimed nursery expenses as a revenue expenses but AO considered the same to be capital expense.
8.Assessee claimed donations made as a deduction in its profit & Loss account but AO disallowed the same.
9. Assessee claimed the credit of TDS and Advance tax without considering 26AS but AO declined that.
Contention of the assesse:
1.Assessee was of the view that as it had paid PF & ESI before the due date of filing of return u/s 139(1) so the same should be allowed as deduction.
2.Pooja expenses and Temple expenses were for the harmony of business so should allowed as a business expenses.
3.Cess on green leaf should be allowed as a revenue expense because they were used for the plantation within the existing plantation area.
4.As payment had been made to the foreign agent who was not having permanent establishment in India so not liable to deduct TDS.
5.Adjustment of wealth tax had to be made for computing the book profits u/s 115JB.
6.As bad debts had been debited to profit & Loss account so AO could not question the validity of bad debts.
7.Nursery expenses were related with the current plantation area as plants had been planted in the existing plantation area, So the above should be considered as a revenue expense.
8.As donations were actually made related with the business so the same should be allowed as a expense.
9.As it was having challans which were proof of depositing TDS and advance tax so the same should be allowed for taking credit.
Contention of revenue:
1.Revenue was of the view that as the dues of ESI and PF had been paid after the due date so the same should be disallowed.
2.As pooja expenses were not related with the business of assesse so pooja and temple expenses were not allowed as deduction.
3. As payment had been made to the agent for commission so TDS should be deducted, which assesse failed to deduct so the amount should be disallowed.
4. Welath tax should be added to the book profits u/s 115JB.
5.As the bad debts which assesse debited to profit & Loss account should not be allowed.
6. Nursery expenses should be considered as capital expense.so the same should be disallowed.
7. Cess on green leaf should not be allowed as an expense.
8.As donations were not allowed as an expense so the same should be added back to the income.
9. As the credit was not showing in form 26AS so credit should not be allowed to the assesse.
Held by High Court:
High Court decided all the above appeals in the favor of assesse. As the contention given by the assesse was accepted by High Court
