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Facts
The assessee's appeal is against an order confirming the disallowance of employees' contribution to ESIC and LWF and an addition made under section 41 for written-back liabilities. The assessee claimed these amounts were already offered for tax.
Held
The tribunal dismissed the ground related to ESIC and LWF, following a Supreme Court decision. For the written-back liabilities, the tribunal restored the issue to the AO for verification as the assessee claimed the amounts were already included in total income.
Key Issues
Whether the disallowance of employees' contribution to ESIC/LWF is correct, and whether the addition for written-back liabilities constitutes double taxation.
Sections Cited
36(1)(va), 41
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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, HON’BLE & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE
O R D E R
PER NARENDRA KUMAR BILLAIYA, AM:
This appeal by the assessee is preferred against the order of the ld. Addl./JCIT(A)-6, Kolkata, [hereinafter ‘the ld. CIT(A)’] dated 07/10/2024, pertaining to AY 2021-22.
The grievance of the assessee reads as under:- “1.0. CPC erred in disallowing and CIT(A) erred in confirming the disallowance of employees' contribution to ESIC and LWF amounting to Rs.11,84,822/- under section 36(1)(va) of the Act. 2.0. CPC erred in making addition under section 41 of the Act and CIT (A) erred confirming the said addition of Rs.5,49,72,039/- relating to liabilities no longer required written back despite the fact that the said amount is already credited to the profit and loss account and included in total income and offered for tax while computing the total income.”
I.T.A. No. 6274Mum/2024 2
The issue raised vide Ground No. 1, is no more res integra as the said quarrel has been settled by the Hon’ble Supreme Court in the case of Checkmate Services P. Ltd. & Ors. vs. CIT & Ors. (2022) 448 ITR 518 (SC). Respectfully following the decision of the Hon’ble Supreme Court, Ground No. 1 is dismissed.
Coming to Ground No. 2, the ld. Counsel for the assessee drew our attention to the documents exhibited in the paper book provision written back of Rs.5,43,40,678/- and Rs.6,31,361/- forfeitures, have already been included in the profit of the assessee, therefore, the action of the CPC by making addition of Rs.5,49,72,039/- amounts to double addition of the same income. The ld. Counsel further drew our attention to the statement of the profit and loss account vis-à-vis the respective amounts in the balance sheet to show that the income has already been included in the profit of the assessee. 5. We have given a thoughtful consideration to the submissions made by the ld. Counsel. We are of the considered view that this needs further verification by the AO to satisfy that the amount written back has been already shown as income. Therefore, in the interest of justice and fair play, we restore this issue to the file of the AO. The assessee is directed to demonstrate writeback provisions and forfeitures have already been included in the statement of total income. The AO is directed to verify the same and decide the issue after affording reasonable and adequate opportunity of being heard to the assessee.
I.T.A. No. 6274Mum/2024 3