THOMSON PRESS INDIA LTD.,NEW DELHI V. ITO WARD 16(1), NEW DELHI

ITA 2736/DEL/2019

AI Insights

Thomson Press India Ltd filed appeals against the orders of the Commissioner of Income Tax (Appeals) concerning disallowances made under various sections of the Income Tax Act, including Sections 14A, 10B, and 10AA, for the assessment years 2009-10 and 2014-15. The main issues revolved around the disallowance of expenses related to investments yielding tax-free income, the treatment of certain incomes as export turnover for claiming exemptions under Sections 10B and 10AA, and the disallowance of bad debts and foreign currency payments. The Tribunal considered previous judgments and the specific circumstances of the case, leading to a decision to partly allow the appeals and direct further verification by the Assessing Officer in certain areas.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 34842 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Other Referred Cases: South Indian Bank vs CIT, CIT vs Excel Industries Ltd, CIT vs Genpact India
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAHIL KUMAR BANSAL
• Assessee Lawyers: SALIL AGARWAL
• Keywords: Set aside; Business income; Proportionate interest; Bad and doubtful debts; Rule of consistency; TDS; Earning of tax free income; Double taxation relief; Rule 8D; Residential status
• Section: 143(3); 13; 14A; 40(a)(ia); 10B; 10AA

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No. 2736/Del/2019 (Assessment Year: 2009-10) Thomson Press India Ltd, K-9, Block, Connaught Circus, New Delhi Vs. ITO, Ward-16(1) New Delhi (Appellant) (Respondent) PAN: AAACT4827F ITA No. 2737/Del/2019 (Assessment Year: 2014-15) Thomson Press India Ltd, K-9, Block, Connaught Circus, New Delhi Vs. Addll. CIT, Special Range-9, New Delhi (Appellant) (Respondent) PAN: AAACT4827F Assessee by : Shri Salil Agarwal, Sr. Adv Shri Shailesh Gupta, Adv Revenue by: Shri Sahil Kumar Bansal, Sr. DR Date of Hearing 12/02/2025 Date of pronouncement 27/02/2025 O R D E R PER MANISH AGARWAL, AM: 1. These are the two appeals filed by the assessee having common issues therefore, they are taken up together and decided by a single order. ITA No. 2736/Del/2019 ITA No. 2737/Del/2019 Thomson Press India Ltd Page | 2 2. First we take ITA No. 2736/Del/2019 dated 2009-10. This is the appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-16, New Delhi dated 31.01.2019 in appeal No. 10048/2012-13 for AY 2009-10. The assessee has taken the following grounds of appeal:- “1. That the learned CIT (Appeals) has erred in law and on facts in sustaining a disallowance under section 14A of the Act which disallowance is unjustified and untenable in law and thus should be deleted as such. 2. That the learned CIT (Appeals) has further failed to appreciate the fact that the investments were made in past and that too out of surplus funds and internal accruals and as such there was no requirement or occasion to have computed disallowance on account of interest paid on borrowings as no investment was made out of borrowed funds and thus the disallowance so made should be deleted on this ground alone. 3. That further the said disallowance made by learned CIT (Appeals) is against the statutory provisions and various judicial pronouncements of Honble high Court of Delhi ie. jurisdictional high court, since there is no satisfaction recorded by learned AO and as such, disallowance so made is misconceived and misplaced in law and should be deleted. 4. That the learned CIT (Appeals) has erred in law and on facts in sustaining a disallowance of a sum of Rs. 87,71,616/- towards exemption u/s 10B and Rs. 1,96,985/- towards exemption u/s 10AA by not treating the other incomes [Misc Income, Compensation, Profit on Exchange Gain] earned from export activities as export turnover but treating the same as total turnover; 5. That the learned CIT (Appeals) has erred in law and on facts in sustaining a disallowance of a sum of Rs. 87,71,616/- towards exemption u/s 10B and Rs. 1,96,985/- towards exemption u/s 10AA by calculating the profits derived from export of article or things after reducing other incomes [Misc Income, Compensation, Profit | on Exchange Gain] from profits of the respective undertakings; 6. That the learned CIT (Appeals) has erred in law and on facts in sustaining a disallowance of a sum of Rs. 87,71,616/- towards exemption u/s 10B by reducing the export turnover to the extent of the amount realized after 30.09.2009; 7. That the learned CIT (Appeals) has erred in law and on facts in sustaining a disallowance of a sum of bad debts written off amounting to Rs. 1,23,11,728/- which has been written off against provision for doubtful debts made in earlier years; 8. That the learned CIT (Appeals) has grossly erred in sustaining the above said disallowance by ignoring the replies and evidences furnished by the assessee ITA No. 2736/Del/2019 ITA No. 2737/Del/2019 Thomson Press India Ltd Page | 3 appellant and the learned CIT (Appeals) has made the said disallowance on irrelevant and extraneous considerations without there being any adverse material and evidence and purely on surmises and conjectures as such disallowance made is wholly untenable on facts and in law 9. That the learned CIT (Appeals) has erred in law and on facts in sustaining a disallowance of a sum of Rs. 1,12,69,843/- towards payment made in foreign currency, 10. That the learned CIT (Appeals) has erred in law and on facts in sustaining a disallowance of a sum of Rs. 1,12,69,843/- by presuming that provisions of TDS as required u/s 195(2) read with section 40(a)(i) has not been complied with by the assessee company; 11. That the learned CIT (Appeals) has grossly erred in sustaining the abovesaid disallowance by ignoring the replies and evidences furnished by the assessee appellant and the learned CIT (Appeals) has made the said disallowance on irrelevant and extraneous considerations without there being any adverse material and evidence and purely on surmises and conjectures as such disallowance made is wholly untenable on facts and in law 12. That the learned CIT (Appeals) has erred in law and on facts in sustaining a disallowance of a sum of Rs. 73,51,056/- towards proportionate interest on capital work in progress; 13. That the learned CIT (Appeals) has grossly erred in sustaining the said disallowance of proportionate interest by ignoring the replies and evidences furnished by the assessee appellant and the learned CIT (Appeals) has sustained the said disallowance on irrelevant and extraneous considerations without there being any adverse material and evidence and purely on surmises and conjectures as such disallowance made is wholly untenable on facts and in law. 14. That the Assessee company reserves the right to add, alter, amend any / all grounds of appeal either before or at the time of hearing of the appeal.” 3. Brief facts of the case are that the assessee company is engaged in the business of commercial printing and phototypresetting. The return of income for the year under appeal was filed on 30.09.2009 at a loss of Rs. 24,85,16,205/-. The case was taken up for scrutiny and assessment was completed u/s 143(3) on 26.12.2011 by making disallowance/ addition of Rs. 4,06,68,196/- and loss declared by the assessee was reduced to Rs. 20,78,48,010/-. Against this the assessee preferred an appeal before the ld CIT(A) who vide impugned order dated 31.01.2019 partly allowed the appeal of the assessee. Thus, the assessee is in appeal before us. ITA No. 2736/Del/2019 ITA No. 2737/Del/2019 Thomson Press India Ltd Page | 4 4. Ground Nos 1 to 3 are in relation to disallowance of Rs. 7,66,968/- made u/s 14A of the Act, by observing that assessee is having interest free income in the shape of dividend, capital gain etc which did not form part of the total income and therefore, he invoked the provisions of Section 14A of the Act read with Rule 8D of the Income Tax Rules and made the disallowance. The AO by applying the provisions of Rule 8D of the Act has computed the disallowance of Rs. 7,66,968/- which includes the interest on the funds involved in making such investment and also the administrative expenses. The ld CIT(A) by relying upon the judgment in assessee’s own case for AY 2012-13 has directed the ld AO recomputed the amount of disallowance by considering the investment yielding non taxable income for the purpose of calculation of disallowance u/s 14A of the Act. While making such direction the ld CIT(A) has also directed the AO to restrict the disallowance of Rs. 6,30,937/- suo moto made by the assessee in its return filed for the year under appeal. 5. Before us the ld AR submit that during the year under appeal after comparing to preceding year fresh investment of Rs. 4 lakhs was made which is a very meager amount and since assessee is having its own capital and reserve surplus therefore, no disallowance should be made more particularly when the assessee suo moto has made the disallowance of Rs. 630,937/-. He further placed reliance on the judgment of the Tribunal in the case of assessee itself for AY 2007-08 in ITA No. 5793/Del/2010 wherein, the Tribunal in its order dated 28.11.2018 has deleted the disallowance made u/s 14A by observing as under:- “10. We have considered the rival submissions as well a Though the assessee has 10 material available on record. challenged the disallowance sustained by the Ld. CIT(A) u/s 14A of the Act to the extent of Rs.7,21,646/-, however, as it is clear from the details of the disallowance made by the Assessing Officer on account of interest expenditure that the correct amount of disallowance is Rs.7,11,740/-plus some disallowance was made by the Assessing Officer on account of administrative expenses which were deleted by the Ld. CIT(A) while accepting the plea of the assessee that the average investment in tax free securities/shares be considered only by taking exempt income yielding investment. Therefore, the dispute before the Tribunal is only in respect of disallowance u/s 14A on account of interest expenditure of Rs.7,11,740/- On perusal of the balance sheet of the assessee, it is evident that the assessee was having more than Rs.160 Crores of ITA No. 2736/Del/2019 ITA No. 2737/Del/2019 Thomson Press India Ltd Page | 5 reserve and surplus as on 31.03.2010, which is many times more than the total investment made by the assessee in the shares. The Hon'ble Supreme Court in the latest judgment in the case of South Indian Bank vs CIT (supra) has reiterated the proposition that if the assessee is having mixed fund comprising of interest bearing and interest free funds then the investment in the shares and securities yielding tax free income will be considered out of interest free funds if the same are sufficient for making such investment. Even otherwise, the assessee has given the details of the secured and unsecured loan which were taken for the specific purpose and acquiring assets as well as business purposes of the assessee and therefore, the expenditure on account of interest cannot be held to be attributable for earning the dividend income. Accordingly, in the facts and circumstances of the case when the assessee is having sufficient interest free own funds in the shape of reserve and surplus then disallowance u/s 14A is called for on account of interest expenditure particularly when the assessee has not made any new investment except meager amount of Rs.19,60,000/- during the year under consideration that too in the subsidiary company which has not yielded any dividend income. Hence, the disallowance made by the Assessing Officer of Rs.7,11,740/- on account of interest expenditure u/s_14A is deleted.” 6. He further submit that in other years also for AYs 2011-12, 2012-13 and 2013-14, this issue has already been decided by the Tribunal by placing reliance on the decision of the Tribunal in AY 2007-08 and therefore, requests for the deletion of the disallowance made u/s 14A of the Act. 7. Per contra the ld DR vehemently supported the orders of the lower authorities and request that the ld CIT(A) has already decided this issue by directing the AO to exclude the investment which has not yielded tax free income and therefore, the assessee should not be further allowed any relief in the matter. He further submit that even otherwise since the assessee itself has made the disallowance of Rs. 6,30,937/- in the return of income therefore, disallowance made should be restricted to this amount only. 8. We have heard the rival submissions and perused the material available on record. From the perusal of the observations of the Tribunal in the case of assessee for AY 2007-08 and also the directions given by the ld CIT(A), we find that the assessee has made fresh investment of Rs. 4 lakhs in the year under appeal as against which it has sufficient own interest free funds in the shape of reserve and capital. Therefore, respectfully following the judgment of the Tribunal in the case of the assessee for preceding year as stated above, we direct the AO ITA No. 2736/Del/2019 ITA No. 2737/Del/2019 Thomson Press India Ltd Page | 6 to delete the addition. However, since the assessee has made suo moto disallowance of Rs. 6,30,937/- therefore, the disallowance to this extent be restricted. Further, from the assessment order it is seen that the AO has made the disallowance of Rs. 766968/- which is in addition to Rs. 630937/- suo moto disallowed by the assessee, therefore, the disallowance of Rs. 766968/- is directed to be deleted. 9. Ground Nos. 4 and 5 are in relation to the disallowance of Rs. 87,71,616/- made towards exemption u/s 10B of the Act and Rs. 1,96,985/- towards exemption u/s 10AA of the Act by not treating the other income (misc income, compensation, profit on exchange gain) earned from export activities. Besides the assessee has certain foreign exchange included in export sale which was not received by the assessee upto the stipulated date and the same was included in the turnover for claiming exempt income by the assessee. The AO has reduced the deductions claimed u/s 10B on such amount received later. 10. Before us the ld AR submits that this issues are squarely covered by the judgment of this Tribunal in the case of assessee for AY 2007-08 in ITA No. 5793/Del/2010 and such order was followed by the Tribunal further in Assessee’s won case for AY 2010-11 to 2012-13 in ITA No. 4306 to 4308/Del/2017 wherein, vide order dated 14.10.2021 the bench has observed as under:- “15. We have considered the rival submissions as well a material available on record. At the outset, we noted that this Tribunal in assessee's own case for the AY 2007-08 in ITA No.5793/Del/2010 vide order dated 20.11.2018 considered an identical issue in paras 3 to 6 as under:- \"3.0 At the outset, the Ld. Authorised Representative submitted that while the matter was being decided by the ITAT in the first round i.e. vide order dated 15.01.2016, the assessee had specifically referred to the details of the miscellaneous income for both the undertakings, details of the compensation income and had also filed a chart showing history of deduction claimed under section 10B in respect of miscellaneous income and compensation income and treatment accorded by the Revenue and had also submitted that in none of the preceding assessment years, disallowance has ever been made. He also referred to the order of assessment passed u/s 143(3) of the Act for the immediately preceding assessment year 2006-07, wherein the AO had himself accepted that miscellaneous income and compensation income was profit derived from ITA No. 2736/Del/2019 ITA No. 2737/Del/2019 Thomson Press India Ltd Page | 7 the undertaking as no disallowance was made. It was also submitted that miscellaneous income and compensation income have been treated as business income and, as such, in accordance with subsection (4) of section 10B of the Act, both the aforesaid items of income should be profits derived from the export, as the assessee had not made any domestic sales and all the sales of the assessee was export sales. In respect of compensation income, it was submitted that same had direct nexus with the profits of the assessee as compensation income was unclaimed salary/leave with wages, which was originally debited while computing the income of the undertaking, but when the same was not claimed, the same was credited and, as such, the same also had direct nexus. In support, the Ld. AR also filed the ledger account as well as the chart indicating that in the preceding assessment year 2006-07, compensation income received by the assessee had been treated as profits derived from the undertaking. Reliance was placed on the judgment of the Hon'ble Apex Court in the case of CIT vs. Excel Industries Ltd reported in 358 ITR 285 wherein it was held that it is inappropriate to allow the reconsideration of an issue for a subsequent assessment year if the same \"fundamental aspect\" permeates in different assessment years and the Revenue cannot be allowed to flip-flop on the issue and it ought to let the matter rest. It was submitted that once the revenue has accepted that miscellaneous income and compensation is profit derived from the undertaking in the earlier assessment years, there was no justification to deny such claim in the instant year where it is not in dispute that nature of income was same as was in the preceding years. 4.0 In response, the Ld. Sr. DR placed reliance on the orders of the authorities below, but could not rebut the fact that the department had accepted that miscellaneous income and compensation was part of income for the purpose of computation of eligible profit u/s 10B of the Act. 5.0 On a query from the Bench, both the parties had no objection if the issue was restored to the file of the AO for allowing the claim of the assessee after due verification. 6.0 Having heard both the parties and in view of the undisputed fact that the Revenue had accepted miscellaneous income and compensation as part of the eligible profits for the purpose of computation of claim u/s 10B of the Act coupled with the concurrence of both the parties for the issue being restored to the file of the AO for verification, we restore the issue to the file of the AO with a direction to allow the claim of the assessee after due verification and also after duly appreciating the fact that similar income/s had been held to be includible in eligible profits in the preceding assessment years.\" 16. Thus, the Tribunal has noted that the Revenue has accepted the miscellaneous income of compensation as part of eligible profit for the purpose of computing the deduction u/s10B of the Act. However, the matter was set-aside to the record of the Assessing Officer for verification of the nature of income and then allow the claim. To maintain the rule of consistency, we follow the earlier ITA No. 2736/Del/2019 ITA No. 2737/Del/2019 Thomson Press India Ltd Page | 8 order of the Tribunal and set-aside the issue to the record of the Assessing Officer for computing the deduction u/s 10B of the Act in terms of directions as given by the Tribunal for AY 2007-08. 17. As regards the reduction of the export turnover on 1 we find that if any sum is reduced from export turnover then the same is also required to be reduced from total turnover because the total turnover comprises of export turnover and non-export turnover. Therefore, following the decision in the case of CIT vs Genpact India (supra) we direct the A.O. to recomputed the deduction u/s 10B of the Act by reducing the said amount from total turnover also.” 11. In the aforesaid order of the Tribunal, the Tribunal considered the fact that with respect to the miscellaneous income and compensation being part of eligible profit for the purpose of computing the deduction u/s 10B of the Act and revenue has already accepted this issue. However, the Tribunal has set aside the matter to the file of AO for verification of the nature of income and then allow the claim. Thus by following the principle of consistency in this year also we set aside the issue to the file of the AO for making verification of the nature of income and compute the deduction u/s 10B of the Act in terms of directions given by tribunal for Ay 2007-08. 12. With regard to the reduction in export turnover towards the amounts which have been received in foreign currency, AO has reduced such amount from the export turnover however, the same is also required to be reduced from the total turnover because the total turnover comprises of export turnover and legal turnover. The Tribunal in its order for AY 2010-11 to 2012-13 following the judgment in case of CIT Vs. Genpact India reported in 203 taxmann 632 (del) has directed the AO to recomputed the exemptions u/s 10B of the Act by reducing the said amount from the total turnover also. The facts in this year are identical. Therefore, by respectfully following the decision of the Tribunal, we direct the ld AO accordingly. As a result, this ground of appeal are allowed for statistical purposes as per the direction given herein above. 13. Ground Nos. 7 and 8 are in respect of bad debts of Rs. 1,23,11,728/- disallowed by the AO and such disallowance was confirmed by the ld CIT(A). ITA No. 2736/Del/2019 ITA No. 2737/Del/2019 Thomson Press India Ltd Page | 9 14. In this regard the ld AR submit that during the year under appeal the assessee in its Profit and Loss Account had claimed bad debts written off of Rs. 12,27,174/- and further claim for provision for doubtful debts of Rs. 3,05,74,218/- . The necessary reconciliation of provision for bad debts wherein, the current year’s provision is added back to the opening provision and thereafter a sum of Rs. 1,23,11,728/- written off during the year were claimed against the gross value of provisions made. This working is available at pages 85 to 93 of the Paper Book filed by the assessee before us. The ld AR submits that provision made towards bad and doubtful debts for the year under appeal was claimed in Profit and Loss Account and written off amount of Rs. 1,23,11,728/- was claimed out of such provisions. However, an amount of provision of doubtful debt charged in profit and loss account of Rs. 3,05,74,218/- was added back to the total income which is evident from the computation of income for the year under appeal which is placed in Paper Book-2 filed by the assessee. He thus submit that when no claim of this amount of Rs. 12311728/- was made during the year and the provision on account of bad and doubtful debt have already added to the total income. Any further disallowance would be double addition and therefore, he prayed for deletion of the addition so made. 15. On the other the ld Sr. DR vehemently supported the orders of the lower authorities. 16. We have heard the rival submissions and perused the material available on record. On verification of the facts, from the computation of income vis-à-vis provision of bad and doubtful debts carried over from the earlier order and adjusted during the year, we find that during the year under appeal the assessee has claimed expenses on account of provision for doubtful debt of Rs. 3,05,74,218/- and no deduction on account of amount written off out of such provision of Rs. 1,23,11,728/- is claimed in the profit and loss account. Under these circumstances no disallowance could be made for the expenses on account of bad debt which was not claimed in Profit and loss Account and was adjusted against the provisions made. It is further relevant to state that when the assessee ITA No. 2736/Del/2019 ITA No. 2737/Del/2019 Thomson Press India Ltd Page | 10 itself has added back the provision for bad and doubtful debt to the total income as per the computation of income therefore, any disallowance made may lead to double taxation of income. Under these circumstances we direct to delete the disallowance of Rs. 12311728/- made by AO. As a result, ground Nos. 7 and 8 are allowed. 17. Ground Nos. 9 to 11 assessee challenging the disallowance of Rs. 1,12,69,843/- made by the lower authorities on account payment made in foreign currency without deducting tax at source as provided u/s 195(2) read with Section 40(a)(ia) of the Act. During the course of hearing the ld AR fairly admitted that this issue has been decided by the Tribunal in assessee’s own case for earlier AYs. 2010-11 to 2012-13 wherein, the Tribunal has confirmed the disallowance. After perusal of the facts we find that the Tribunal in its order dated 14.10.2021 in ITA Nos. 4306 to 4308/Del/2017 has confirmed the disallowance made in earlier year. The relevant observation of the Tribunal is as under:- “23. We have considered the rival submissions as well a material available on record. At the outset, we note that the Assessing Officer has the made disallowance Rs.1,15,64,807/- u/s 40(a)(i) of the Act for want of TDS as well as the explanation of the assessee. The Ld. CIT(A) has granted part relief to the assessee in respect of expenditure incurred for bank charges, spares parts and general charges. The rest of the disallowance to the extent of Rs.62,71,694/- was confirmed by the Ld. CIT(A) on the ground that the assessee has not able to substantiate its claim of non- taxability of these amounts in the hands of the recipient by producing supporting relevant details as to the residential status of the payee and the relevant provisions of DTAA. We find even before the Tribunal, the assessee has not produced the relevant details of the residential status as well as the respective DTAA between India-UK and India-USA. Though, it is contended by the assesse that in view of the Article-7 of the DTAA, the income is not taxable in India in the hands of the recipient however, nothing has been brought on record to point out how the income in the hand of the recipient is not taxable in India. Accordingly, in the facts and circumstances of the case, we do not find any reason to interfere with the impugned order of the Ld. CIT(A) qua this issue and the same is upheld.” 18. The facts for the year under appeal are similar to the facts in earlier year, where the Tribunal has confirmed the addition and assessee has also not controvert such finding before us. Thus, by respectfully following the observation ITA No. 2736/Del/2019 ITA No. 2737/Del/2019 Thomson Press India Ltd Page | 11 made by the Tribunal supra, the disallowance made in this year is hereby confirmed. As a result, ground Nos. 9 to 11 are dismissed. 19. Ground Nos. 12 and 13 are in relation to disallowance of Rs. 7351056/- made out of interest related to funds involved the capital work in progress. 20. During the course of hearing the ld AR submits that this issue is also similar to the disallowance made in the earlier year wherein the Tribunal vide its common order for AY 2010-11 to 2012-13 in ITA No. 4306 to 4308/Del/2017 has decided the issue and sent the matter back to the file of the AO for making verification of secured and unsecured loans and further verified whether any part of the loan were utilized in respect of expenses forming part of capital work in progress. After considering the facts we find that there is no quarrel about the facts which was similar to the earlier years. The observation of the Tribunal given in para 29 of the aforesaid order are as under:- “29. We have considered the rival submissions as well As material available on record. So far as the interest expenditure incurred on the secured loans is concerned, it is matter of record that the loan is taken for specific purpose and utilized for specified the assets. Therefore, the expenditure incurred on secured loans which is not utilized for capital working in progress cannot be attributed towards the capital work in progress. However, it is a matter of fact to be verified whether any unsecured loan is taken by the assessee for specific purpose being part of the capital working in progress. As regards the unsecured loans, it is primary onus of the assessee to prove that the unsecured loan is not utilized for the expenditure incurred towards capital work in progress. In the absence of these specific details, this issue cannot be decided conclusively. Accordingly, in the facts and circumstances of the case, we set-aside the issue to the record of the Assessing Officer for verification of the facts regarding purpose of taking secured and unsecured loans and also to verify the details whether any part of the loans was utilized by the assessee in respect of the expenditure forming part of the capital work in progress. The Assessing Officer then decide the issue after giving an opportunity of hearing to the assessee.” 21. Accordingly, by respectfully following the direction given by the Tribunal in earlier years, we set aside this issue to the file of the AO for necessary verification as directed hereinabove. 22. As a result, ground Nos. 12 to 13 are allowed for statistical purposes. ITA No. 2736/Del/2019 ITA No. 2737/Del/2019 Thomson Press India Ltd Page | 12 23. In the result, the appeal of the assessee is partly allowed. ITA No. 2737/Del/2019 for AY 2014-15 24. In appeal for AY 2014-15, there are three effective grounds taken by the assessee. 25. Ground Nos. 1 and 2 raised by the assessee are in relation to disallowance u/s 14A and disallowance of exemption u/s 10AA which are similar to the grounds taken for AY 2009-10 decided herein above in assessee’s appeal. By following the same observation made the ground Nos. 1 and 2 are partly allowed for statistical purposes. 26. Ground No. 3 to 3.2 are in relation to disallowance of Rs. 1,11,24,938/- towards leave encashment u/s 43B(f) of the Act. 27. During the course of hearing the ld AR submits that this issue is also similar to previous year where for AY 2012-13 the Tribunal vide its order dated 14.10.2021 in ITA No. 4306 to 4308/Del/2017 has allowed the deduction by following the judgment of Hon'ble Supreme Court in the case of UOI Vs. Exide Industries 273 taxmann 189 whereby the Hon'ble Supreme Court has held that the amount paid is allowable as deduction in the year of actual payment and not in the year when the provisions is made. The directions given the Tribunal in assessee’s own case for AY 2012- in para 40 are as under: “40. We have considered the rival submissions as well a material available on record. There is no dispute that this expenditure on account of leave encashment has not been actually paid by the assesse to the employees during the year under consideration therefore, in view of the judgment of the Hon'ble Supreme Court in the case of UOI vs Exide Industries Ltd. (Supra), the same is allowable as deduction in the year of actually payment and not in the year when the provisions is made. Therefore, this ground of the assessee's appeal stand dismissed. However, the Assessing Officer is directed to consider the claim of the assessee in the year when actual payment is made towards the leave encashment.” ITA No. 2736/Del/2019 ITA No. 2737/Del/2019 Thomson Press India Ltd Page | 13 28. Following the above direction in this year also, we direct the AO to allow the claim of the assessee in the year when actual payment is made towards the leave encashment. As a result, the ground nos. 3 to 3.2 are partly allowed. 29. In the result, the appeal of the assessee is partly allowed for statistical purposes. 30. To sum up, both the appeals are partly allowed. Order pronounced in the open court on 27/02/2025. -Sd/- -Sd/- (ANUBHAV SHARMA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:27/02/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "