BLUERESERVOIR BUSINESS SERVICES LLP,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1(1)(1), BANGALORE

PER CHANDRA POOJARI, ACCOUNTANT MEMBER:

Blue Reservoir Business Services LLP, Bangalore

Page 2 of 5 and gains from business of Rs 52,24,794/- and Income from other sources Rs 10,124/-. The tax liability was determined at Rs 16,33,295/- which the assessee discharged by claiming TDS credit of Rs 17,09,422/- and claiming a refund of Rs 76,130/-. The return was processed and a communication from the CPC dated 23.12.2021 and the assessee received a intimation under section 143(1) of the Act demanding a sum of Rs 1,00,240/- as tax payable and interest and a notice of demand was issued. The Assistant Director of CPC proceeded to pass the intimation order giving effect to the following. The loss on sale of assets sold discarded of Rs 4,50,860/- was disallowed by the assessee and the same was shown under serial no. 7(b) in Schedule BP in the income tax return. The same is reported in the Tax Audit Report under clause 21(a) Amount debited to profit and loss account in the nature of capital expenditure. While passing the intimation, the learned ADIT, CPC has once again disallowed the loss on sale of discarded assets to the tune of Rs 4,50,860/- by adding back as income under the head profits and gains of business or profession. This has resulted in a double disallowance of the same expense. The assessee has added disallowed a sum of Rs 350/- being the penalties and fined and the same has been disallowed under serial number 7(i) of Part A :OI Other Information in the income tax return. The same is reported in the Tax Audit Report under clause 21(a) Expenditure by way of penalty or fine not covered above. While passing the intimation, the ld. ADIT, CPC has once again disallowed the penalties and fines to the tune of Rs.350/- by adding back as income under the head profits and gains of business or profession. This has resulted in a double disallowance of the same expense. The assessee has disallowed a sum of Rs.32,18,906/- as amount

Blue Reservoir Business Services LLP, Bangalore

Page 3 of 5 inadmissible under partners remuneration and the same has wrongly been reported as Rs.32,81,499/- in the tax audit report.

Blue Reservoir Business Services LLP, Bangalore

Page 4 of 5 4. We have heard the rival submissions and perused the materials available on record. At the time of hearing, the ld A.R. submitted that the ex-parte order passed by the ld. CIT(A) to be set aside as the Principal Officer of the assessee company who is looking after affairs of assessee company was not well versed with ITBA portal. Hence, there was no compliance on the various notices issued by the NFAC and prayed that one more opportunity be given to present the case of the assessee’s counsel. Accordingly, we remit the entire issue in dispute to the file of NFAC to decide the issue on merit after giving opportunity of hearing to the assessee. Since we have remanded the issue to the file of NFAC to give an opportunity, we refrain from going into the other grounds raised by the assessee on merit of the addition and kept it open.