PRONTOS PRIVATE LIMITED,PARWANOO vs. ITO, WARD PARWANOO, PARWANOO

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH VIRTUAL HEARING BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No.1303/CHANDI/2025 (िनधा�रण वष� / Assessment Year: 2013-14) M/s Prontos Private Limited ITO Ward Plot No. 63 – 66, Sector – 5 Parwanoo बनाम/ Vs. Distt. – Solan, Parwanoo Himachal Pradesh - 173220 �ायीलेखासं./जीआइआरसं./PAN/GIR No. AACCP-8135-G (अपीलाथ�/Appellant) (��थ� / Respondent) : अपीलाथ�कीओरसे/ Appellant by : Sh. M.L. Mutneja (CA) – Ld. AR ��थ�कीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) - Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 20-05-2026 घोषणाकीतारीख /Date of Pronouncement : 02-06-2026 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2013-14 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 22.08.2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 147 r.w.s. 144B of the Act on 29.03.2022. The grievance of the assessee is two folds i.e., (i) Confirmation of disallowance u/s 40(a)(ia) for Rs.1,26,708/-; (ii)

Addition for closing stock of branch office for Rs.7,43,098/-. Having heard rival submissions, the issues are adjudicated as under. 2. Disallowance u/s 40(a)(ia) The assessee paid professional charges for Rs.1,26,708/- but did not deduct applicable tax at source (TDS) u/s 194J on the ground that the payment to each payee was below threshold limit. However, Ld. AO made disallowance for want of documentary evidences. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. The perusal of ledger of professional fees as placed on Page No.42 of the paper book would indicate that the assessee has made professional payment to various payees and not to a single payee. The basic payment to each of the payees does not exceed threshold limit of Rs.30,000/-. Therefore, the assessee is not obligated to deduct tax at source on these payments. Accordingly, the impugned addition stands deleted. The corresponding grounds of appeal stand allowed. 3. Addition for stock lying at branch office Upon perusal of assessee’s financials, Ld. AO alleged that the closing inventory of branch office for Rs.7,43,098/- was omitted to be shown by the assessee in its Profit & Loss Account. The assessee explained that it was having branch office at Dera Bassi and it transferred finished goods to the branch office as sale. The branch sold the goods at the same price. The stock lying at branch office was duly accounted for by the assessee separately. However, not convinced, Ld. AO added this amount to the income of the assessee. The Ld. CIT(A) confirmed the

stand of Ld. AO against which the assessee is in further appeal before us. From the records, it could be seen that the opening and closing stock position of the assessee is as under: - No. Particulars As on 31.03.2013 (Rs.) As on 31.03.2012 (Rs.) Change in Inventory (Rs.) 1. Finished Goods (Head Office) 75,42,773/- 1,45,03,348/- 69,60,575/- 7,43,098/- 2. Finished Goods (Branch) 19,45,354/- 12,02,256/- Total 94,88,127/- 1,57,05,604/- 62,17,477/-

The Ld. AO has observed that though the net change in inventory is Rs.62,17,477/-, the assessee has claimed change of Rs.69,60,575/- and accordingly, the differential of Rs.7,43,058/- has been added to the income of the assessee. This difference is arising in view of the fact that head office has sold goods to the branch for Rs.13,07,17,784/- which has been shown as sales in the books of Head Office. However, the branch has sold goods for Rs.12,99,74,686/- leaving balance stock of Rs.7,43,098/-. The branch sells the goods at the same price. The branch is accordingly debtor of the head office to the extent of stock and the differential is not a Profit or Loss of the assessee company. The branch office stock is considered as sale and the amount recoverable from the branch is in the form of stock. As the branch is debtor for sales and therefore, the difference in its opening and closing stock has to be ignored in full. These facts have not been fully appreciated by both the lower authorities. Therefore, this addition could not be sustained. We order so. Since assessee’s grounds on merits

have been allowed, the legal arguments thus advanced by Ld. AR have been rendered infructuous and academic in nature. 4. The appeal stands partly allowed.

Order pronounced on 02nd June, 2026.

-Sd- -Sd- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 02-06-2026 AS आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

ASSISTANT REGISTRAR

ITAT CHANDIGARH