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Income Tax Appellate Tribunal, DELHI BENCH ‘H’ : NEW DELHI
Before: SH. ANIL CHATURVEDI & SH. ANUBHAV SHARMA
The appeal has been filed by the assessee against order dated 31.10.2019 in appeal no. 10131/2019-20 for the assessment year 2017-18 passed by Commissioner of Income Tax (Appeal)-9, New Delhi (hereinafter referred to as the First Appellate Authority in short ‘Ld. F.A.A.’) in regard to the appeal before it arising out of assessment order dated 18.01.2019 u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by DCIT, CPC (hereinafter referred to as the Assessing Officer ‘AO’).
ZF Hero Chassis Systems P. Ltd. 2
The facts in brief are the return of income was filed u/s 139 on 28.01.2019 declaring total income of Rs. 17,98,96,000/-. The return of the appellant was processed u/s 143(1), wherewith, the Centralized Processing Centre had computed a disallowance of Rs 1,43,96,397/- , being the difference between the disallowance made in the return of income, amounting to Rs 1,86,36,271, vis-a-vis, those made by the tax auditor in Form 3.CD amounting to Rs 3,30,32,668/-. Thereafter, the appellant, against such intimation under Sec 143(1), filed an application for rectification under Sec 154 of the Act. However, the said adjustment was affirmed by the CPC. Against the above stated adjustment of Rs 1,43,96,397/-, the appellant submitted before the Ld CIT(A), that it had disallowed the said amount and that the intimation u/s 143(1) makes a double disallowance of the same expenditure. 2.1 Ld CIT(A) observed “On considering the submissions, I do not find any merit in the submissions of the appellant. While the appellant contends that it has already made a disallowance of Rs 1,43,96,397/- it’s reply dt 23.10.2018 speaks otherwise. In the said reply, the appellant submits the breakup of total disallowance of Rs 6,24,67,884/-, wherewith I observe that the appellant, for the disallowances under Sec. 37 of the Act, has disallowed Rs 1,86,36,271/- and that the balance amounts of Rs 3,15,14,528/- corresponds to specific disallowances under other sections of the Income Tax Act, which has been rightly processed in the intimation under Sec 143(1) [Reference to Page 41 , at S.No 16, 17 and 18]. Therefore, for the disallowances under Sec 37 of the Act, the appellant has been grossly unable to prove as to why it has made disallowance of Rs 1,86,36,271/-, while the Tax Auditor has disallowed Rs 3,30,32,668/-, and thus, the appellant has failed to show as to how the additional disallowance of Rs 1,43,96,397/- stands incorporated in the return of income. That being said, since the intimation under Sec. 143(1) and the consequential order under Sec. 154 of the Act, have computed the disallowances from the return of income and the tax audit report of the assessee, therefore, there arises no mistake apparent from record and hence, the contentions of ZF Hero Chassis Systems P. Ltd. 3
the appellant stands dismissed.” 3. Now before this Tribunal the Assessee has raised the following grounds of appeal:- “1 (a) That the Ld. CIT(A)-9, Delhi has wrongly confirmed the order passed u/s 154 in pursuance to intimation u/s 143(1) and confirmed the addition at Rs. 1,43,96,397/-. That the Ld. CIT(A) has wrongly confirmed double (b) disallowance of Rs. 1,43,96,397/- being the difference of amount of disallowance of Rs. 3,30,32,668/- as per point no. 21(a) of Tax Audit Report & amount shown only in cell no. A-15 of Schedule BP of ITR at Rs. 1,86,36,271/- by ignoring the other expenses disallowed & shown in cell no. A-23 of Schedule 'BP' at Rs. 3,15,14,528/-of ITR. That the CIT(A) failed to appreciate that the amount (c) to be disallowed as per point no. 21(a) of Tax Audit Report at Rs. 3,30,32,668/- has been duly disallowed and is included in cell no. A-15 & A-23 of Schedule "BP” in the ITR-6 filed by the assessee. [Total of cell A15 XA23 is 50150799/-]. That the Ld. CIT(A) has failed to appreciate and (d) upheld the true income.”
4. Heard and perused the record.
5. On behalf of the assessee, a reconciliation / computation statement has been submitted to show that as such there was no difference in the amount shown in Form 3CD and the Schedule BP of ITR. The same is reproduced as below;
Summary of disallowance
Amount as shown in cell Amount as no A 15 of schedule BP shown point of ITR (refer page no. no. 21(a) of 33 of paper book) / form 3CD Amount as shown in (refer page clause 7(k) of schedule no 63 of OI (page no 22 of paper book) paper book) Loss on sales of fixed assets 807234 807234 ZF Hero Chassis Systems P. Ltd. 4 Provision for restructuring 5309542 5309542 Provision for warranty 2165122 Provision for doubtful cenvat 10354373 credit Provision for impairment 4556612 Provision for goodwill 22359280 impairment 18636271 33032668 Amount disallowed by CPC 14396397 Reconciliation with the ITR / computation statement Particulars Computation ITR-6 Clause No– Statement Schedule BP of ITR PBT 250472000 250472000 A1 (Page no 32 of paper book) Add Depreciation as per 33970255 33970255 A11 (Page no 33 of paper book) books U/s 43B 1753602 1753602 A18 (Page no 33 of paper book) U/s 40A(7) 3997062 3997062 A17 (Page no 33 of paper book) U/s 40(a)(ia) 6566421 6566421 A16 (Page no 33 of paper book) Loss on sales of fixed 807234 assets 18636271 A15 (Page no 33 of Provision for 5309542 paper book) restructuring Provision for warranty 2165122 Provision for doubtful 10354373 cenvat credit Goodwill impairment 22359280 Provision for 4556612 A23 (Page no 34 of impairment of F/A 31514528 paper book) Interest u/s 201 37077 Provision for MTM 4561559 Loss
346910139 346910139 Less:- Depreciation as per IT 47760911 47760911 A12 (iii) (Page no Tax Act 33 of paper book) Leave Encashment 83260 83260 A31 (Page no 34 of disallowed in previous paper book) year and allowable u/s 43B Bonus disallowed in 1213057 1213057 A33 (Page no 34 of ZF Hero Chassis Systems P. Ltd. 5 previous year and paper book) allowable u/s 43B Gross Total Income 297852911 297852911 D (Page no 35 of paper book) Set off of brought 117956916 117956916 forward loss Total Income 179895995 179895995 Page no 28 of paper book
The reconciliation submitted requires verification, therefore, assessment order is set aside and the issue is restored to the files of jurisdictional AO with a direction to take into consideration the reconciliation statement as submitted by the assessee and if required hold a further enquiry by giving opportunity of hearing to the assessee and pass a fresh order. The appeal is accordingly allowed for statistical purposes.
Order pronounced in the open court on 12th July, 2022.