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Income Tax Appellate Tribunal, DELHI “SMC-1” BENCH: NEW DELHI
Before: SHRI KUL BHARAT
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “SMC-1” BENCH: NEW DELHI
(THROUGH VIDEO CONFERENCING)
BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER
ITA No.1611/Del/2020 Assessment Year : 2018-19 Alloy Cast Pvt.Ltd., vs ITO, Flat No.915, 9th Floor, Ward-2(2), Indra Prakash Building, New Delhi. 21, Barakhamba Road, New Delhi-110001. PAN-AAACA8532G APPELLANT RESPONDENT Appellant by Sh.Vipin Jain, CA Respondent by Sh.Gaurav Pundir, Sr. DR Date of Hearing 20.07.2021 Date of Pronouncement 04.08.2021
ORDER PER KUL BHARAT, JM : This appeal filed by the assessee for the assessment year 2018-19 is
directed against the order of Ld. CIT(A)-I, New Delhi dated 25.08.2020. The
assessee has raised following ground of appeal:-
1) “That on the facts and in the circumstances of the case, the Ld. DCIT, CPC Bangalore, has erred in computing the Income of the assessee company at Rs.23,49,370/- u/s 143(1) of the Income Tax Act 1961, vide order dated 02.07.2019, as against return filed shown income at Rs.17,74,155/- by making additions/disallowance totaling Rs.5,77,410/-. That the additions/disallowance made are incorrect and against law and are without jurisdiction. It is prayed that the additions made to income be directed to be deleted.
That the Ld. CIT(A) has erred in confirming Rs 5,64,980 disallowed by The DCIT CPC Bangalore, u/s 43B in respect of TDS/GST/PF/ESI amounts outstanding on 31103/2018, deposited by the assessee
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company by 7th of April 2018. That the amount having been deposited in time, additions /disallowance made to income is incorrect and is against law and requires to be deleted.
That the Ld. CIT(A) and The Ld DCIT CPC Bangalore have failed to judiciously considered the explanation/ submission made by the assessee company that the details of Payments made in respect of TDS/GST/PF/ESI amounts outstanding on 31/03/2018, were inadvertently shown against Sr No. 26(i)(B)(a) of Tax Audit reports in Form 3CD, instead of being shown against Sr. No. 26(i) (B)(a) of the said report and the same cannot be the basis to make the disallowance.
That the Ld. DCIT CPC Bangalore, has erred in disallowing Rs 12,430/- out of Club expenses, incurred in the course of and for the purpose of business, and is therefore an allowable expense.”
The facts giving rise to the present appeal are that while processing the
return, Centralized Processing Centre (“CPC”), Banglore made adjustment of
Rs.5,64,980/- and also made addition of Rs.12,430/- on account of
inconsistency in total amount of disallowance u/s 37 of the Income Tax Act,
1961 (“the Act”) on the basis of the detailed report in Form No.3CD.
Aggrieved against this, the assessee preferred appeal before Ld.CIT(A)
who after considering the submissions, dismissed the appeal of the assessee.
Now, the assessee preferred appeal before this Tribunal.
Ld. Counsel for the assessee reiterated the submissions as made in the
written submissions. For the sake of clarity, written submissions of the
assessee are as under for ready-reference:-
ITA No.1611/Del/2020 Assessment Year : 2018-19
“The assessee company had filed return declaring Income at Rs.17,74,155, which the Ld CPC Bangalore determined u/s 143(1) at Rs.23,51,566 after making adjustments totaling Rs 5,77,411 (12,430 + 5,64,981) to the income shown as per details given as under:
(i) Club expenses added to income Rs 12,430
(ii) Disallowance made u/s 43B Rs.5,64,981
2.1. Details of club expenses are filed at Pg 7 of the ws.
2.2. Details of disallowance made u/s 43B are as under:
GST Payable Rs. 4,13,689 Deposited on 12.04.2018 Pg 8 of ws TDS on contractors Rs. 4,707 Deposited on 05.04.2018 Pg 9 of ws TDS on interest Rs. 877 Deposited on 05.04.2018 Pg 10 of ws TDS on Professional fees Rs. 4,950 Deposited on 05.04.2018 Pg 11 of ws TDS on salary Rs. 17,610 Deposited on 03.04.2018 Pg 12 of ws PF Payable Rs. 1,04,256 Deposited on 03.04.2018 Pg 13 of ws ESI Payable Rs. 18,892 Deposited on 04.04.2018 Pg 14 of ws Total Rs.5,64,981 Challans in evidence of the amounts deposited above are filed at Pgs 8 to 14 of the ws.
The assessee company explained to the Ld. DC Bangalore and to the Ld. CIT(A) and there was inadvertent error in typing the details against wrong column, explained as under.
(i) Rs 12,430 incurred on dub expenses were inadvertently typed in the tax audit against 81 No 21(6), instead of being typed against Sl. Nos 21(4) or 21(5) of 3CD of the tax audit report.
(a) Sl. No 21{4) of 3CD of the tax audit report reads as under: "Expenditure incurred at clubs being entrance fees and subscriptions". Pg 18 of the ws.
(b) Sl No 21(5) of 3CD of the tax-audit report reads as under: "Expenditure incurred at clubs being cost for dub services and facilities used. Pg 18 of the ws.
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(c) Sl No 21(6) of 3CD of the tax audit report reads as under: "Expenditure by way of penalty or fine for violation of any law for the time being. Pg 18 of the ws [ii] Details of payments made u/s 43B were inadvertently typed in the tax audit report against SI No 26B(b) instead of being typed against Sl Nos 26B(a) of 3CD of the tax audit report. Pg 20 of the tax audit report. 4. a) The assesse company has deposited the above amounts to the credit of the Govt within the statutory time, and in any case before the due date of filing the return. (31.10.2018). (b) Copies of challans in evidence of the amounts deposited were attached with the Tax Audit report and were also filed before the CIT(A). (c) The auditor's have not recommended any amount to be disallowed. The disallowance made is incorrect and is against law. (d) The Ld CPC Bangalore ought to have accepted the explanation of the assesse company and made no addition/disallowance. The Ld CPC has exceeded his jurisdiction by overlooking the provisos to section 143(1). (e) The Ld. CIT(A) has erred in endorsing the disallowance made by CPC Bangalore on different grounds. 5. Relevant provisions of section 143(1) of the I tax Act, 1961, applicable in the present appeal, read as under: 143 (1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:- (a) the total income or loss shall be computed after making the following adjustments, namely:- (i) any arithmetical error in the return; (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; Page | 4
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(iii) disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139," (iv) disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return; (v) disallowance of deduction; or (vi) addition of income appearing in Form 26AS……… Provided that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode: Provided further that the response received from the assessee, if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such intimation, such adjustments shall be made: [Provided also that ……………..(a) to (e)………………….. - (a) "an incorrect claim apparent from any information in the return" shall mean a claim, on the basis of an entry, in the return,- (i) of an item, which is inconsistent with another entry of the same or some other item in such return; (ii) in respect "of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction; (b) the acknowledgement of the return ……………………. 7. Power of attorney is filed at Pgs 30 to 31 of the ws.”
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Ld. Sr.DR opposed these submissions and supported the orders of
authority below.
I have considered the rival contentions and perused the material
available on record. It is seen from the submission of the assessee that it
contains factual information that goes to the root of the matter. Hence, I
hereby set aside the impugned order and restore the grounds of appeal
alongwith the evidences annexed with the Paper Book to the file of Ld.CIT(A).
Ld.CIT(A) is, therefore, directed to decide the issue afresh after considering the
factual information submitted by the assessee in the form of challans of
payment of GST, TDS, EPF and ESI. The grounds of appeal raised by the
assessee are thus, allowed for statistical purposes only.
In the result, the appeal of the assessee is allowed for statistical
purposes.
Above decision was pronounced on conclusion of Virtual Hearing in the
presence of both the parties on 04th August, 2021.
Sd/- (KUL BHARAT) JUDICIAL MEMBER
*Amit Kumar* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT
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