PREMIER ROADLINES LIMITED,DELHI vs. DCIT, CPC, BANGALORE

The present appeal has been filed by the assessee against the order of ld. CIT(A)-7, New Delhi dated 11.09.2020.

Delay condoned.

An adjustment of Rs.8,81,042/- made by the CPC u/s 43B/40A(7) of the Act. The assessee has already offered the amount of unpaid gratuity which is evident from the reply filed by the assessee during regular proceedings for A.Y. 2017-18 vide letter dated 27.11.2019. The explanation of the assessee has been accepted by the AO in the Assessment Order passed u/s 143(3) dated 11.12.2019 wherein no addition on account of unpaid gratuity has been made by the AO after duly enquiring the same vide notices issued u/s 142(1) dated 27.09.2019 and 08.11.2019.

Since, no addition has been made on account of unpaid liability of Rs.8,81,042/- in the final assessment order, the adjustment made in the processing intimation does not survive and the assessee is entitled to be relieved from the adjustment made in the processing order when the AO making final assessment finds after examination of records that no addition on that account needs be made. It is a fact on record that the assessee company has disallowed the above provision of gratuity in the return of income as evident in the computation of income submitted before the AO vide letter dated 16.09.2016. Hence, the order of the ld. CIT(A) is liable to be dismissed.

In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 29/08/2022.