The Income Tax Appellate Tribunal (ITAT), Delhi Bench has held that leave and pension contributions to state government employees cannot be treated as bogus and granted relief to Vishakhapatnam Port Road Company Ltd.
The appellant, Vishakhapatnam Port Road Company Ltd., is engaged in the business of constructing, operating and maintaining toll roads for adequate connectivity to Vishakapatnam Port Trust. During the scrutiny assessment under section 143(3) of the Act, the Assessing Officer made an addition under section 68 of the Act on account of non-confirmation of credit balances Rs.1,34,880/- payable as leave and pension contribution to Ms. P Meera Anusha who came from State Government under deputation as undisclosed credit balances.
Aggrieved by the assessment order the appellant approached CIT(A), which dismissed the appeal. Hence, the appellant filed a second appeal before the ITAT. The counsel for the appellant submitted that M/s. P. Meera Anusha was a State Government employee who had come on deputation and the appellant was required to pay her apart from her salary, the leave, and pension contribution and reimbursement of expenses like Telephone, newspaper, etc. once a year after receiving a request from the State Govt. Hence, the payments are not in doubt and therefore there is no reason in making additions.
The Tribunal observed that the appellant placed on record a copy of the claims towards the expenses and the leave and pension contribution made by the appellant through the parent organization and has also demonstrated that the amount has been paid by the appellant in the subsequent year.
The Coram of Mr. Anil Chaturvedi, Accountant Member, and Mr. Anubhav Sharma, Judicial Member has held that “considering the totality of the aforesaid facts and in the absence of any evidence placed by the Revenue to demonstrate that the payment is bogus, we are of the view that no disallowance of aforesaid expenses is called for in the present case. We, therefore, direct its deletion thus the ground of the assessee is allowed”.
Ms. Khushboo, C.A., and Mr. M. Baranwal appeared on behalf of the appellant and respondent respectively.By
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
