GRID CONTROLLER OF INDIA (FORMERLY KNOWN AS POWER SYSTEM OPERATION CORPORATION LTD),DELHI vs. DCIT CIRCLE-19(1), DELHI

2.3 Lastly grants in aid of Rs.38,45,173/- is a non current liability being of capital nature, hence is not taxable as income though it has been added computation u/s 143 (1) of the Income-tax Act, 1961. In the return of income credit of TDS of Rs. 32,49,84,734/- was claimed against which credit for Rs. 17,23,82,192/- has been given. The credit claimed is appearing in 26AS, hence the company is entitled to the credit of TDS as claimed. During the previous year the Dividend Distribution Tax of Rs.24,17,055/- was paid on 9th October, 2017.

However, in the intimation credit for this payment has not been given and a demand of Rs.30,69,670/- including interest of Rs.6,52,607/- has been created.

3. The Ld.CIT(Appeals) has sustained the additions except deleting the addition on profit on sale of fixed assets of Rs.87,542/- by concluding that the same was on depreciable assets and there is no short term capital gain as per the provisions of Section 50 of the Act.

“1. On the facts and circumstances of the case, the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) is bad both in the eyes of law and on facts.

2. On the facts and circumstances of the case, the CIT(A), NFAC has erred both on . facts and in law in passing the impugned order by ignoring the fact that the AO (CPC) has made disallowance by exercising the power which are beyond the scope of section 143(1) of the Act. 3. (i) On the facts and circumstances of the case, the CIT(A), NFAC has erred both on facts and in law in confirming the disallowance of Rs.3,11,94,858/- made by the AO (CPC) on account of employees contribution to recognized provident fund (PF) invoking section 36(1)(va) of the Act. (ii) That the above said disallowance has been confirmed ignoring the settled position in law that employees contribution to PF and ESI would qualify for deduction if the same is paid before due date of filling of return of income, even if the same is paid after the due date prescribed under the PF/ESI Act. (iii) That the above said disallowance has been confirmed without considering the fact that the Explanations inserted to section 36(1)(va) and 43B vide Finance Act, 2021 w.e.f 01.04.2021 are prospective in nature and not merely clarificatory. (iv) That the above said disallowance has been confirmed without considering the fact that the issue of 'employees’ contribution to PF/ESI’ is at most debatable in nature. (v) Without prejudice to above and in the alternative, the CIT(A), NFAC has erred both on facts and in law in confirming the entire addition, without considering the fact that out of Rs.3,11,94,858/-, a sum of Rs.1,69,33,589/- had already been deposited within the time limit prescribed under the PF Act. 4. (i) On the facts and circumstances of the case, the CIT(A), NFAC has erred both on facts and in law in confirming the addition of Rs. 38,45,173/- on account of grant in aid. (ii) That the above said addition has been confirmed ignoring the fact that grant aid received by the assessee are in the nature of capital receipts. (iii) That the above mentioned addition has been confirmed ignoring detail explanations provided by the assessee, and the fact that the grant received h been deducted from capital cost of assets in the year of receipts itself. 5. (i) On the facts and circumstances of the case, the CIT(A), NFAC has erred both on facts and in law in confirming the action of AO (CPC) of not allowing the credit of Rs.24,17,055/- on account of Dividend Distribution Tax. (ii) That the above action of AO (CPC) has been confirmed ignoring the details explanations provided by the assessee and by misinterpretation of the provisions of section 1150 of the Act. (iii) That the above action of AO (CPC) has been confirmed ignoring the fact that computation of interest of Rs.6,52,607/- under section 115P of the Act is erroneous and bad in law.

6. Without prejudice to the above, the CIT(A), NFAC has erred in confirming the action of AO (CPC) without considering the fact that regular assessment proceedings had already been initiated prior to the intimation under section 143(1) and no addition has been made by the AO on all the above issues while passing the order under section 143(3) of the Act.”

Hence, this is not income of the year. Ld. AR has relied on the general ledger entry and submitted that no depreciation has been claimed. Since, the amount has been deducted from the cost as is evident from the tax audit report.

Consequently, this issue is also restored to the files of the Ld. AO.

“1. During the year under consideration assessee has deposited Rs.24,17,055/- vide challan no. 280 (PB Pg.257) on account of dividend distribution tax which is evident from perusal of Form 26AS available at PB Pg 255-256 and relevant amount is on PB Pg 256. Further, the details of same have also been furnished in the income tax return (PB Pg. 132) under Schedule DDT.

2. In the intimation u/s 143(1) of the Act dated 21.02.2020, without giving credit of the DDT paid Rs.24,17,055/-, has computed interest liability under section 115P of Rs.6,52,607/- and has raised total demand of Rs.30,69,670/- on account of DDT.