VASTRAKALA EXPORTS P LTD,TAMIL NADU vs. CIT (APPEALS), CHENNAI

At the time of hearing, none appeared for assessee. The Ld. Sr. DR pleaded for dismissal of the appeal. Upon perusal of case records, our adjudication would be as under. 2. It emerges that the assessee was assessed u/s 143(3) on 29.12.2019 after disallowance of bonus for Rs.18.83 Lacs, disallowance u/s 36(1)(va) for Rs.2.92 Lacs and addition of Rs.2.55 Lacs on account of difference in opening stock.

During appellate proceedings, the assessee submitted that the amount of Rs.18.83 Lacs was wrongly shown as bonus in the Tax Audit Report. The amount was actually paid to the employees as part of the salary and not otherwise distributable as profits or dividends. However, Ld. CIT(A) confirmed the disallowance. Aggrieved, the assessee is in further appeal before us. 4. We find that Ld. CIT(A) has confirmed the disallowance without considering the plea of the assessee. Therefore, we restore this issue to the file of Ld. AO for re-adjudication to consider the plea raised by the assessee during appellate proceedings. This issue stand allowed for statistical purposes. 5. The assessee was saddled with disallowance u/s 36(1)(va) for Rs.2.92 Lacs since the PF / ESI dues were deposited beyond due date as specified in respective acts. The Ld. CIT confirmed the same considering the decision of Hon’ble Supreme Court in bunch of appeals titled as Checkmate Services P. Ltd. Vs CIT (143 Taxmann.com 178), confirmed the disallowance against which the assessee is in further appeal before us. 6. Since the adjudication of Ld. CIT(A) follows a binding judicial precedent, the same do not require any interference on our part. This issue stand dismissed. 7. The last addition was on account of observation of Ld. AO that closing stock of Rs.2.55 Lacs was of AY 2016-17 was not brought forward as opening stock in this year. The assessee pleaded that it was mere non-disclosure in the audit report. However, Ld. CIT(A) confirmed the addition against which the assessee is in further appeal before us.

We find that the plea of the assessee has not been properly addressed by Ld. CIT(A). The mistake in tax audit report could not lead to addition in the hands of the assessee. Therefore, this issue is restored back to Ld. AO for adjudication with a direction to substantiate its plea. This issue stand allowed for statistical purposes. 9. The appeal stand partly allowed for statistical purposes. Order pronounced on 28th November, 2023.