The Income Tax Appellate Tribunal (ITAT), Delhi Bench ruled that leave and pension contributions to state government employees do not be treated as fake and granted relief to Vishakhapatnam Port Road Company Ltd.
The petitioner, Vishakhapatnam Port Road Company Ltd., has the business of constructing, operating and maintaining the toll roads for enough connectivity to Vishakapatnam Port Trust. In the action of investigating the assessment under section 143(3) of the Act, the assessing officer incurred an addition under section 68 of the income tax act on the basis of the non-confirmation of credit balances of Rs.1,34,880 need to be paid as leave and pension contribution to Ms. P Meera Anusha who arrived from State Government under delegation as undisclosed credit balances.
The petitioner, aggrieved from the assessment order approached CIT(A), who dismissed the petition. Thus the petitioner has furnished another petition to Income Tax Appellate Tribunal (ITAT). the counsel for the appellant submitted that M/s. P. Meera Anusha was a State Government employee who had come on delegation and the appellant was mandated to pay her beyond her salary, leave, and pension contribution and reimbursement of expenses like Telephone, newspaper, and others. Post to obtaining the request from the state government once a year. No suspicion is there regarding the payment and hence there shall be no reason in doing an addition.
Tribunal sees that the petitioner report on record a copy of the claims for the expenses and the leave and the contribution of the pension incurred through the petitioner via parent company and would indeed show that the amount would be paid by the petitioner in the next year.
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The Coram consisting of Mr. Anil Chaturvedi, Accountant Member, and Mr. Anubhav Sharma, Judicial Member ruled 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”.
On behalf of the appellant and respondent, Ms. Khushboo, C.A., and Mr. M. Baranwal appeared respectively.
