RAJA UDYOG (P) LTD.,BARRACKPORE, 24-PARGANAS (N) vs. ACIT, CC-4(3), KOLKATA, KOLKATA

ITSSA 44/KOL/2024Status: DisposedITAT Kolkata30 July 2024AY 2018-20198 pages
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What were the facts?

The assessee, Raja Udyog (P) Ltd, filed appeals against orders of the CIT(A)-27, Kolkata, for assessment years 2017-18 and 2018-19. The appeals concerned additions made by the Assessing Officer (AO) under sections 143(3) and 153C of the Income Tax Act, 1961. In ITA No.944/Kol/2024 (AY 2017-18), the grounds related to a Rs.73,65,644/- provision for gratuity and Rs.20,76,540/- for delayed deposit of employees' PF/ESI contributions. In IT(SS)A No.43/Kol/2024 (AY 2017-18), grounds included the validity of section 153C proceedings, a Rs.76,371/- addition for alleged cash payment, the gratuity provision, and the PF/ESI contribution issue. IT(SS)A No.44/Kol/2024 (AY 2018-19) challenged a Rs.7,32,646/- addition for delayed PF/ESI contributions under section 153C.

What did the Tribunal hold?

On the issue of provision for gratuity (Rs.73,65,644/-), the Tribunal restored the matter to the Assessing Officer (AO) to verify the assessee's contention of inadvertent double disallowance. If confirmed, the AO is directed to assess income by disallowing only the amount liable under the relevant provisions, giving the assessee benefit of any excess disallowance. Regarding delayed PF/ESI contributions (Rs.20,76,540/- for AY 2017-18), the assessee did not press the ground, accepting the Hon'ble Supreme Court's verdict in Checkmate Services Pvt. Ltd. vs. CIT. Thus, this ground was dismissed as not pressed. For the Rs.76,371/- addition under section 153C (AY 2017-18), the Tribunal deleted the addition, finding no evidence in the assessment order to establish that the cash amount was received by M/s. Sunny Chemical Pvt. Ltd. from the assessee, and noting the assessee's categorical denial. The Rs.20,76,540/- addition for delayed PF/ESI contributions in the section 153C assessment (AY 2017-18) was dismissed as not relating to incriminating material found during search, as it was an amount already assessed in the section 143(3) assessment. For the Rs.7,32,646/- addition for delayed PF/ESI contributions under section 153C (AY 2018-19), the Tribunal deleted the addition, holding that no incriminating material was found in the search action, and the issue was already decided in favour of the assessee by a prior ITAT order. The Tribunal noted that the prior ITAT order in ITA No.180/Kol/2022 for AY 2018-19 would prevail.

What were the issues?

1. Whether the CIT(A) erred in confirming the addition of Rs.73,65,644/- for provision for gratuity, which was allegedly disallowed twice in the Tax Audit Report (TAR) under sections 40A(7) and 43B(b) (Assessee's contention: inadvertent double disallowance by CA, seeking correction; Revenue's contention: not recorded). 2. Whether the CIT(A) erred in confirming the addition of Rs.20,76,540/- for delayed deposit of employees' PF and ESI contributions under section 36(1)(va) r.w.s. 2(24)(x) (Assessee's contention: unjustified addition; Revenue's contention: not recorded). 3. Whether the CIT(A) erred in upholding the AO's authority under section 153C to reassess income for completed assessments without incriminating material (Assessee's contention: bad in law, quash order; Revenue's contention: not recorded). 4. Whether the CIT(A) erred in confirming the addition of Rs.76,371/- for cash payment allegedly made to M/s. Sunny Chemical Pvt. Ltd. based on seized documents from a third party, without corroborative evidence or cross-examination opportunity (Assessee's contention: no transaction, no evidence, no cross-examination; Revenue's contention: not recorded). 5. Whether the CIT(A) erred in confirming the addition of Rs.7,32,646/- for delayed deposit of employees' PF and ESI contributions under section 36(1)(va) in assessment proceedings under section 153C, when the issue was settled by a prior ITAT order in favour of the assessee (Assessee's contention: no incriminating material, issue settled by ITAT; Revenue's contention: not recorded).

Which sections of the Income-tax Act were involved?

Section 40A(7),Section 43B(b),Section 36(1)(va),Section 2(24)(x),Section 153C,Section 69C,Section 143(3)

AI-generated summary — verify with the full judgment below

आयकर अपील"य अ"धकरण, कोलकाता पीठ ‘सी’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA Before Shri Sanjay Garg, Judicial Member and Shri Sanjay Awasthi, Accountant Member Assessment Years: 2017-18 Raja Udyog (P) Ltd…..…………….....……………………....………....Appellant Sukchar Girja, 16F, Barrackpore Trunk Road, 24 Parganas (N), W.B – 700115. [PAN: AACCR0764P] vs. ACIT, CC-4(3), Kolkata…...................................................…..…..... Respondent I.T.(SS)A. No.43/Kol/2024 Assessment Year: 2017-18 Raja Udyog (P) Ltd…..…………….....……………………....………....Appellant Sukchar Girja, 16F, Barrackpore Trunk Road, 24 Parganas (N), W.B – 700115. [PAN: AACCR0764P] vs. ACIT, CC-4(3), Kolkata…...................................................…..…..... Respondent I.T.(SS)A. No.44/Kol/2024 Assessment Year: 2018-19 Raja Udyog (P) Ltd…..…………….....……………………....………....Appellant Sukchar Girja, 16F, Barrackpore Trunk Road, 24 Parganas (N), W.B – 700115. [PAN: AACCR0764P] vs. ACIT, CC-4(3), Kolkata…...................................................…..…..... Respondent Appearances by: Shri Rajeeva Kumar, Advocate, appeared on behalf of the appellant.

Shri Rakesh Kr. Das

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