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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
O R D E R Per Amarjit Singh (AM): The present appeal filed by the assesse is directed against the order passed by the NFAC, Delhi dated 04.10.2022 for A.Y. 2018-19. The assesse has raised the following grounds before us: “1. Ground 1: Disallowance of deduction of INR 41,41,536 in respect of expenditure allowed on Provision for Gratuity Written Back 1.1 Under the facts and circumstances of the case and in law, the National e-Assessment Centre (NEAC) erred in not allowing deduction in respect of Provisions for Gratuity Written back incurred of INR 41,41,536. In doing so, the NEAC erred in the following respects: 1.1.1 in not appreciating the fact that the aforesaid amount represents Provisos for gratuity that are written back from disallowed provisions and hence is allowable as deduction under section 37(1) of the Act; 1.2 In view of the above grounds of appeal, the appellant prays that deduction ought to be granted under section 37(1) of the Act in respect of P a g e | 2 CMS Securities Limited Vs. National E-Assessment Centre, Dehli the Provisions for Gratuity Written Back of INR 41,41,536 while computing the business income. Other Grounds 1.3 Erred in not allowing the TDS credit of INR 67,03,643 as claimed in the return of income allowing TDS credit of INR 53.75.551 1.4 Erred in Levying Interest under Section 2340 of the Act of INR 64,521. 1.5 Erred in initiating the penalty under Section 274 read with Section 270A of the Act
2. All the aforesaid grounds are independent, in alternative and without prejudice to one another.
3. The Appellant craves, to consider the above grounds of appeal without prejudice to each other and craves leave to add, alter, delete, or modify all or any of the above grounds of appeal.”
2. This case was listed for hearing on 07.02.2023, 02.03.2023 and 19.04.2023 respectively, however, neither anybody from the side of the assesse has attended the proceedings nor made any written submission. Therefore, the issue contested in the appeal are adjudicated after hearing the ld. D.R and perusal of material placed on record.
3. The fact in brief is that return of income declaring total income of Rs.11,99,220/- was filed on 30.10.2018. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 21.09.2019. During the course of assessment proceeding the A.O noticed that assessee claimed deduction of Rs.1,73,90,657/- towards any other amount allowable as deduction in schedule BP of the ITR. On perusal of the detail filed the A.O found that the aforesaid amount includes a sum of Rs.41,41,536/- being provisions for gratuity written back. On further verification the A.O noticed that the said amount of provision for gratuity written back was not credited to the profit and loss account. The AO stated that assessee has failed to establish with supporting documents/evidences the assessment year for which the amount of provision for gratuity was subject to disallowance. Therefore, P a g e | 3 CMS Securities Limited Vs. National E-Assessment Centre, Dehli the A.O has disallowed the amount of Rs.41,41,536/- clamed as deduction on account of written back the provision for gratuity.
Even during the course of appellate proceedings before the ld. CIT(A) the assessee was specifically apprised that the said amount was not found credited in the profit and loss account and assesse was specifically requested vide notices dated 20.05..2022, 21.06.2022, 07.07.2022 and 25.07.2022 to explain the said discrepancy with supporting documentary evidences. However, the assessee has failed to furnish the specific explanation/clarification with regard to the aforesaid discrepancy. Even during the course of appellate proceedings before us the assessee has failed to establish with relevant documentary evidences that such provision was disallowed in earlier assessment year and the same has been credited in the profit and loss account during the year under consideration. In view of the above facts and finding we don’t find any infirmity in the decision of ld. CIT(A), therefore, ground no. 1.1 & 1.2 of the assessee stand dismissed. Ground No. 1.3: Allowing TDS credit of Rs.53,75,551/- as against claim of TDS credit of Rs.67,03,643/-: 5. On the perusal of the order of the ld. CIT(A) and Form No. 35 filed before the ld. CIT(A) it is found that assessee has not raised any other ground except disallowance of deduction of Rs.41,41,536/- pertaining to provision for gratuity written back. The assessee has not brought before us any contrary submission therefore, this ground of appeal
of the assesse stand dismissed.
6. Ground No. 1.4 levying of interest u/s 234C is consequential, therefore, the same is not required any adjudication accordingly this ground of appeal of the assessee is also dismissed.
7. In the result, the appeal of the assessee is dismissed.