SK. MAHMUD ALAM,KOLKATA vs. ITO, WARD 3(1), MALDA, MALDA

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ITA 1462/KOL/2026Status: DisposedITAT Kolkata11 August 2026AY 2018-201911 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal set aside the CIT(A)'s order on labour expenditure and Section 10AA deduction, remanding these issues to the AO for fresh examination with additional evidence. Additions related to net cash flow and proprietor's capital were partly allowed, with directions for AO verification. Procedural grounds concerning scrutiny selection were dismissed.

What were the facts?

The assessee appealed against the CIT(A)'s order concerning disallowances and additions made by the AO for AY 2018-19. Key issues included disallowance of labour expenditure, erroneous deduction under Section 10AA, additions for increased net cash flow and proprietor's capital, and procedural grounds regarding scrutiny selection.

What were the issues?

Whether the disallowance of labour expenditure and the claim of deduction under Section 10AA were correctly handled, and whether additions for cash flow and capital increase were justified without rejecting books of account.

Which sections of the Income-tax Act were involved?

Section 250,Section 10AA,Section 68,Section 44AD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH AT KOLKATA

Before: SHRI YOGESH KUMAR US & SHRI RAKESH MISHRA

For Appellant: Ms. Natabrata Bhattacharya, Adv

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH AT KOLKATA Before SHRI YOGESH KUMAR US, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No(s). 1462/KOL/2026 Assessment Year(s) 2018-19 Sk. Mahmud Alam ITO, Ward-3(1), Malda Vs. (Appellant) (Respondent) PAN: AIOPA7047D Appearances: Assessee represented by : Ms. Natabrata Bhattacharya, Adv. Department represented by : Praveen Das Chowdhury, Sr. DR. Date of concluding the hearing : 22.07.2026 Date of pronouncing the order : 11.08.2026 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') for AY 2018-19 dated 25.02.2026. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: "01. Disallowance towards Labour expenditure for A.Y. 2018-19. It is most respectfully submitted that salaries and wages are variable components. The Impugned Order dated 25.02.2026 has erroneously held that for A.Y.2017-2018, the component of salaries and wages was to the tune of Rs. 12,35,590/-. On a close perusal of the Appellant's Profit and Loss Account for the year 31 Match 2017, it may be noted that the amount Rs.12,35,590/- falls under the category of Employee Benefit Expenses while Salary and Wages shall be an amount of Rs 19,21,060, after adding

7.

Our attention was also drawn to pages 1 to 26 of the paper book being the muster role for various months and is the attendance register and it was stated that for AY 2017-18 expenses under the head salaries and wages were incurred at ₹12,35,590/- on total revenue of ₹70,46,439/- while for the impugned assessment year expenses under the same head are shown at ₹45,35,938/- on total revenue from operation of ₹76,10,032/- the sum of ₹33,00,348/- was treated as unexplained expenditure in the absence of any explanation from the assessee as to how the expenditure had shot up almost by four times, and the disallowance was confirmed by the Ld. CIT(A). During the

Assistant Registrar ITAT, Kolkata Benches Kolkata

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