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| The Tax Publishers2020 TaxPub(DT) 0571 (Mum-Trib) INCOME TAX ACT, 1961
Section 37(1)
Where amount in dispute was actually paid to the employees during the year, though, the claims of the employees in respect of such expenditure were not received, however, that by itself does not make the provision for expenditure contingent in nature, therefore, expenses claimed by assessee were allowed.
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Business expenditure - Advance paid to employees - Employees did no t submit claim -
Assessee was engaged in business of providing Information Technologies Enabled Services (ITES), trading and manufacturing of business automation machines, etc. In course of assessment proceedings. AO called upon the assessee to furnish details of various expenses debited to profit & loss account. While verifying the details submitted by assessee, he noticed that an amount being provision made for travelling and conveyance expenses has been debited to profit & loss account on lump sum basis. AO that provision made by assessee was contingent in nature, AO disallowed the amount. Held: Amount in dispute was actually paid to employees during the year, though, the claims of the employees in respect of such expenditure were not received. However, that by itself does not make provision for expenditure contingent in nature. The factual aspect of issue was verified by CIT(A) and he had concluded that expenditure had crystallized during the year. Revenue had also not brought any material on record to show that any part of the aforesaid expenditure was claimed by assessee in succeeding assessment year. Therefore, expenses were allowed to assessee.
REFERRED : CIT v. Intervet India Pvt. Ltd. (2014) 49 taxmann.com 14 (Bom) : 2014 TaxPub(DT) 2053 (Bom-HC)
FAVOUR : In assessee's favour
A.Y. : 2013-14
INCOME TAX ACT, 1961
Section 40(a)(ia)
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