PETRON ENGINEERING CONSTRUCTION LIMITED ,MUMBAI vs. D.C.I.T, CIRCLE 14(1)(1), MUMBAI FORMALLY KNOWN AS OFFICE D.C.I.T. 14(2)(2), MUMBAI , MUMBAI

On the facts and circumstances of the case in law, The Ld. CIT (A) has erred in confirming stand of A.O. on debatable issue before him u/s 154 of the Act.

On the facts and circumstances of the case in law, The Ld. CIT (A) has erred in confirming addition of Rs.6,38,22,923/- on account of work contact Tax.

The Ld. AR of the appellant has filed an additional ground during the course of hearing before the ITAT as follows :-

On the facts and circumstances of the case in law, Ld. AO erred in levied double taxation of WTC claim which was already taxed in A.Y. 2010-11. 2. On the facts and circumstances of the case in law, Ld. AO erred in ignoring the facts that same income is already tax in A.Y. 2010-11 and it was noted in assessment order dated 1.3.2013. Further the same facts was ignored while passing rectification order on 31.3.2016. 2. As the appeal is against the order of Ld. AO under section 154 of the I.T. Act, it is observed from the order that the addition was made because the appellant company has revised the computation of income and claimed a sum of Rs. 6,38,22,923/- as deduction under section 43B of the Act being S.T. Paid during the year. As per appellant’s own admission, this sum was not debited to profit and loss account and reflected in books of account as loans and advances in the Balance-Sheet. As this is not a sum/liability to pay and also not accrued in the current previous year, the same cannot be allowed as deduction under section 43B of the Act, as claimed by the appellant company in the revised “Computation of Income”. Hence, the Ld. AO made the addition under section 154 of the I.T. Act.

The Ld. CIT(A) confirmed the addition made by the Ld. AO in the assessment stating that all the figures/information was available on record i.e., profit and loss account, books of account and computation of income etc. But, still originally the Ld. AO, did not disallow the amount of sales tax which was not debited to profit and loss account, but at the same time claimed as deduction under section 43B of the Act in the Revised Computation of Income and hence incorrect. Thus, Ld. CIT(A) held it as a Petron Engineering Construction Limited

Aggrieved by the orders of Ld. CIT(A), the appellant filed an appeal before ITAT.

The Ld. AR of appellant filed a paper book during the appeal proceedings which contains the assessment orders under section 143(3) passed for assessment years of earlier years, original computation of income, revised computation of income etc. From this paper book, and additional grounds of appeal, it is seen that, the Ld. AO already taxed all the disallowances under section 43B of the Act during the A.Y. 2010-11, which was not brought to the notice of Ld. AO/Ld. CIT(A). It was argued by Ld. AR of the appellant company that an addition of Rs. 3,37,94,573/- was already added by Ld. AO while completing the assessment of A.Y. 2010-11. After this addition, the Ld. AR of appellant claims that a balance of Rs. 15,82,186/- only is to be added under section 154 of the I.T. Act, which is the excess claim, as against the addition made by Ld. AO in various assessment years, claimed by appellant were given as a chart during the appeal proceedings which is reproduced below :- Assessment Year

After hearing both sides, it is decided the matter is remanded back to the file of Ld. AO for verification of these figures and correct disallowance to be made under section 43B of the Act.

The appeal is allowed for statistical purposes.

The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.