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Income Tax Appellate Tribunal, KOLKATA BENCH ‘SMC’, KOLKATA
Before: Shri Sonjoy Sarma & Shri Girish Agrawal]
ORDER
Per Sonjoy Sarma, JM:
This appeal of the assessee for the assessment year 2021-22 is directed against the order dated 29.05.2023 passed by the ld. Commissioner of Income-tax, Appeals, NFAC, Delhi [hereinafter referred to as ‘the ‘ld. CIT(A)’]. The assessee has raised the following grounds of appeal:
“i. That the Ld CIT(A) was highly unjustified and wrong in enhancing the income by an amount of Rs. 1,05,196/- ( Rs 80,194/- plus Rs. 25,002/-) without considering the facts of the case. ii. For that on the facts and circumstances of the case, the Ld. AO was wrong and unjustified in not allowing deduction u/s 43B(a) of Rs. 80,194/- being Cess on Green Leaf paid during the year relating to preceding Assessment Year 2020-21. iii. For that on the facts and circumstances of the case. the Ld. AO was wrong and unjustified in not allowing deduction u/s 43B(b) of Rs. 25,002/- being Provident Fund and P.F. Administrative Charges paid during the year relating to preceding Assessment Year 2020-21. iv. For that on the facts and circumstances of the case, the Ld. AO was wrong and unjustified in adding a sum of Rs. 7,05.329/- u/s 41 of I.T. Act, 1961 ignoring the fact that the said income was offered tax in Income Tax Return in Serial No. 14 of Part-A of P & L account.
Manabarrie Tea Company Limited v. That the Appellant craves leave to amend or to alter the aforesaid grounds which it considers necessary for expedience in the proper determination of the appeal before or at the hearing thereof.”
Brief facts of the case are that the assessee filed its return of income for the A.Y. 2021-22 by declaring income in ITR as Nil. However, CPC on processing of the return of income filed by the assessee and computed the income of the assessee at Rs. 8,10,530/-. On perusal of the CPC’s order, we find the entire enhancement to the total income of the assessee made solely due to enhancement to the income declared under the head “profit and gains from business or profession” whereas income declared in ITR was Rs. 1,17,29,581/-. However, CPC has computed the same at Rs. 1,25,40,106/- making following disallowances under the three heads:
“(A) In the ITR filed, the assessee had claimed following expenses u/s 43B as allowable during the year, which were disallowed under section 43B in any preceding previous years (a) Any sum in the nature of tax, duty, cess or fee under any law: Rs.80,194/- (b) Any sum payable by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees : Rs. 25,002/- Total amount allowable under section 43B; Rs.1,05,196/- However CPC has not allowed the above expenses to the assessee. (B) CPC has also added a sum of Rs.7,05,329/- u/s 41 of the Act, after observing that this was an amount of profit chargeable to tax under section 41, which has not been offered for tax in the ITR filed. Total of (A)+(B) = Rs.1,05,196/- plus Rs.7,05,329/- = Rs.8,10,525/- rounded off to Rs.8,10,530/-. In tabular form, in the CPC's order, following adjustments are mentioned, as made by CPC.
Manabarrie Tea Company Limited Heading As reported in As Proposed ITR mentioned in adjustment in Annexure-3 total income There is inconsistency 25,002/- 0 25,002/- in any amount debited to profit and loss account of the previous year but disallowable under section 43B claimed in return and audit report There is inconsistency 80,194/- 0 80,194/- in any amount disallowed under section 43B in any preceding previous year but allowable during the previous year claimed in return and audit report There is inconsistency 0 7,05,329/- 7,05,329/- in the amount of profit chargeable to tax under section 41 specified in return & in audit report Total 8,10,525/-
Aggrieved by the above order, assessee went in appeal before the ld. CIT(A) where the appeal of the assessee was dismissed.
Feeling aggrieved by the above order, assessee is in appeal before the Tribunal raising various grounds.
Ground no. 1 in the instant appeal does not require to be adjudicated. As ground no. 1 is connected with ground no. 2 & 3 of the instant appeal.
First we take up ground no. 2 of the instant appeal where the ld. AR claimed that the view taken by the AO was not justified by disallowing the claim of assessee of Manabarrie Tea Company Limited Rs. 80,194/- made towards cess of green leaf during the year relevant to preceding assessment year 2020-21. In this connection, he brought to our notice from the intimation order passed u/s 143(1) by CPC at page no. 5 para 2 where the claim of the assessee was disallowed. In this context, he submitted that the alleged amount was already disallowed by the assessee its own u/s 43B of the Act while filing its return of income for the A.Y. 2020-21 and to substantiate its claim, the ld. AR produced before us the copy of the computation of income for A.Y. 2020-21 by showing us the figure of said disallowance made by the assessee. Further, in order to prove the fact, he produced before us tax audit report for the A.Y. 2020-21 whereby reflecting the figure of Rs. 80,194/- in clause 26(i)(B)(b) in serial no. 14 where the assessee its own disallowed a sum of Rs. 80,194/- u/s 40B of the Act. He further contended that since once it is disallowed by the assessee its own in such circumstances no further disallowance can be made in the assessment year 2021-22 by CPC and as such view taken by CPC is uncalled for.
On the other hand, ld. DR objected to the prayer made by the AR and he supported the decision rendered by the authorities below.
We after hearing the rival submission of the parties and perused the material available on record. We find that a sum of Rs. 80,194/- payment made towards cess on green leaf by assessee its own and disallowed the said
Manabarrie Tea Company Limited amount from its income for the A.Y. 2020-21 u/s 43B of the Act and assessee in order to prove the fact has submitted necessary document before us as such view taken by ld. CIT(A) by confirming the action of ld. AO is not sustainable and we direct the AO to delete the addition of Rs. 80,194/- made in the hands of assessee. In terms of above, ground no. 2 taken by the assessee is hereby allowed.
The another issue, i.e. issue no. 3 whereby a sum of Rs. 25,002/- was disallowed by the ld. CIT(A) by sustaining the view taken by CPC payment made towards PF and PF administrative charge made by assessee. In this connection, the ld. AR contended that the amount was disallowed by the assessee u/s 43B from the income of the assessee from the A.Y. 2020-21 and further not to be disallowed in the A.Y. 2021-22. However, the contention of ld. AR in this context, we are not agree with the submission made by the AR of the assessee since the issue is already covered against the assessee in view of the Hon’ble Supreme Court judgement rendered in Chekmate Services Pvt. Ltd. vs CIT (2022) taxmann.com 178 (SC) dated 12.10.2022 wherein it has been held that “deduction u/s 36(1)(va) in respect of delayed deposit of amount collected towards employees’ contribution to PF cannot be claimed when it was deposited within the due date of filing of return even when read with Section 43B of the Income-tax Act,1961.” We, therefore, respectfully following the decision of the Hon’ble Supreme (supra)
Manabarrie Tea Company Limited which squarely covered against the assessee in the instant ground no. 3 taken by the assessee and it is hereby dismissed.
Ground no. 4 relates to addition of Rs. 7,05,329/- made u/s 41 of the I.T. Act was added in the hands of assessee as it has not been shown as income u/s 41 which was mentioned in tax audit report. In this respect, the ld. AR submitted that the alleged income of Rs. 7,05,329/- was already offered for taxation in the return of income in sub-clause (xi) of clause no. 14 of Part A of P & L Account as liability is no longer required. He further contended that since the income has already offered for taxation by assessee, it cannot be taxed twice on the same amount. In support of his contention, he placed before us a paper book containing the income tax return along with annexure to prove the fact before us going through the same, we find that the addition made by CPC sum of Rs. 7,05,328/- in the hands of assessee is without any basis. Therefore, we direct the AO to delete the addition of Rs. 7,05,328/- in the hands of assessee. In view of the above, ground no. 4 taken by the assessee is hereby allowed.
In the result, the appeal of the assessee is allowed partly.