DMC AUTOMOTIVE PRIVATE LIMITED,TIRUVALLUR vs. ASSESSING OFFICER, CORPORATE WARD, INCOME TAX DEPARTMENT,NUNGAMBAKKAM

आयकर अपीलीय अिधकरण “ए” �ायपीठ चे�ई म�। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, CHENNAI

माननीय *ी वी. दुगा0 राव, �ाियक सद2 एवं माननीय *ी मनोज कुमार अ7वाल ,लेखा सद2 के सम9। BEFORE HON’BLE SHRI V. DURGA RAO, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ ITA No.792/Chny/2022 (िनधा0रण वष0 / Assessment Year: 2017-18) M/s. DMC Automotive Private Ltd. The Assessing Officer बनाम/ No.5, Othappai Village, Uthukottai Taluk Corporate Ward-1(4) Vs. Odappai B.O, Poondi, Tiruvallur-602 023. Chennai. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AACCD-4671-P (अपीलाथ /Appellant) : (#$थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Shri Govindarajan (CA) – Ld. AR #$थ कीओरसे/Respondent by : Shri ARV Sreenivasan – (Addl. CIT) – Ld. DR सुनवाईकीतारीख/ : 26-10-2022 Date of Hearing घोषणाकीतारीख / : 02-11-2022 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member):

been decided by Hon’ble Supreme Court in favor of revenue in its recent decision in bunch of appeals titled as Checkmate Services P. Ltd. Vs CIT (Civil Appeal No.2833 of 2016 dated 12.10.2022). It is admitted position that this decision applies to the facts of case before us. In the above background, the appeal is disposed-off as under. The registry has noted a delay of 1 day in the appeal which stand condoned. 2. The assessee’s return was scrutinized u/s 143(3) on 20.12.2019. The Ld. AO made disallowance u/s 36(1)(va) for Rs.14.39 Lacs and reduced the loss declared by the assessee. The said adjustment was made while computing Book Profits u/s 115JB also. The Ld. CIT(A) confirmed the disallowance. Regarding 115JB, Ld. CIT(A) observed that no such disallowance has been made by Ld. AO. Aggrieved, the assessee is in further appeal before us. 3. So far as the reduction of loss in normal provisions is concerned, respectfully following the binding decision of Hon’ble Supreme Court as cited above, the stand of Ld. CIT(A) stand confirmed. The corresponding grounds stands dismissed. 4. The Ld. AR submitted that such a disallowance should not be added while computing Book Profits u/s 115JB. We find that as per provisions of Sec.2(24)(x), the contribution so received by assessee from its employees would become its income and the deduction would be allowed to the assessee if dues are deposited as per the mandate of Sec.36(1)(va). However, Book Profits u/s 115JB means profits as shown in the statement of Profit & Loss Account. The Book Profits are to be further adjusted to the extent as provided in Explanation-1 to Sec.115JB(2). Such an adjustment of employee’s contribution has not been envisaged therein. Further, upon receipt of contribution, the

assessee becomes liable to deposit the same and it is reflected as ‘current liabilities’ for the assessee. The same is added to the income of the assessee in the computation of income and if the assessee deposit the same as per the mandate of Sec.36(1)(va), the deduction of the same is allowed to the assessee. Thus, this amount is not credited to Profit & Loss Account but the adjustment of the same is made in the computation of income. Therefore, this disallowance, in our opinion, would not form part of Book Profits u/s 115JB. We order so. The Ld. AO is directed to verify the same and compute correct Book Profits u/s 115JB. The corresponding grounds stands allowed for statistical purposes. 5. The appeal stands partly allowed for statistical purposes.

Order pronounced on 02nd November, 2022.

Sd/- Sd/- (V. DURGA RAO) (MANOJ KUMAR AGGARWAL) �ाियक सद2 /JUDICIAL MEMBER लेखा सद2 / ACCOUNTANT MEMBER

चे5ई / Chennai; िदनांक / Dated : 02-11-2022 EDN/- आदेश की Vितिलिप अ7ेिषत/Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु� (अपील)/CIT(A) 4. आयकर आयु�/CIT 5. िवभागीय �ितिनिध/DR 6. गाड� फाईल/GF