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Facts
The assessee filed a return for AY 2014-15 declaring a loss. The Assessing Officer made additions of Rs. 31,67,621/-. The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal restored the appeal to the CIT(A) for reconsideration on grounds 6, 7, and 8, directing an opportunity for hearing and perusal of documentary evidence.
Key Issues
Whether the CIT(A) erred in confirming the disallowances of wages, repairs, and other expenses without proper consideration of evidence and grounds.
Sections Cited
250, 143(3), 2(22)(x), 36(1)(a)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH KOLKATA
Before: Shri Rajesh Kumar & Shri Pradip Kumar Choubey
Assessment Year: 2014-15 Sarwottam Ispat Ltd……….. ……………………………….……….……Appellant 11-B, Goenka Niketan, Jatindra Mohan Avenue, Kol - 700006. [PAN: AAECS4392N] vs. DCIT, Circle-2(2), Kolkata…………………………….....……...…..…..Respondent Appearances by: Shri Anil Kochar, Advocate, appeared on behalf of the appellant. Shri S. B. Chakraborthy, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : September 02, 2025 Date of pronouncing the order : September 12, 2025 ORDER Per Pradip Kumar Choubey, Judicial Member:
This is an appeal filed by the assessee against the order of the Commissioner of Income Tax, Appeal ADDL/JCIT(A)-2, Gurugram [hereinafter referred to as the ‘CIT(A)’] u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’) dated 09.01.2025.
Brief facts of the case are that the assessee filed return of income for the assessment year 2014-15 declaring a loss of Rs.1,92,58,912/-. The Assessing Officer passed an order u/s 143(3) making additions on various issues amounting to Rs.31,67,621/-.
Aggrieved by the said order, the assessee preferred an appeal before the ld. CIT(A) wherein also the appeal of the assessee has been dismissed.
“1. For that the orders passed by the lower authorities are arbitrary, erroneous, without proper reasons, invalid and bad-in-law, to the extent to which they are prejudicial to the interests of the appellant.
2. For that the Ld. CIT(A) erred in dismissing the appeal of the appellant without properly considering relevant facts and written submissions.
3. For that the Ld. CIT(A) failed to consider contentions raised by the appellant relating to the Grounds of Appeal and erred in dismissing the same without giving proper and legitimate attention to the same.
4. For that on the issue involved with reference to provisions contained in Sec.2(22)(x) r.w.s 36(1)(a) of the Income Tax Act, 1961 and erred in confirming the addition of Rs.94,400/- on alleged grounds.
5. For that the Ld. CIT(A) ought to have considered the factual aspect relating to the deposit of PF of Rs.94,400/- which was deposited within the due dates of furnishing the return of income.
6. For that the Ld. CIT(A) erred in confirming the disallowance of Rs.20,00,000/- being the payment of wages being manufacturing expenses on estimate.
7. For that the Ld. CIT(A) erred in confirming the disallowance of Rs.20,00,000/- without any justification.
8. For that the Ld. CIT(A) erred in confirming disallowance of Rs.2,00,000/- relating to Repair of Plant & Machinery.
9. For that the Ld. CIT(A) erred in confirming disallowance of Rs.4,85,258/- which was claimed by the appellant as being related to discarded assets on alleged grounds.
10. For that the Ld. CIT (A) erred in confirming addition of Rs.8,816/- on account of prior period expenses. 11.For that the Ld. CIT (A) erred in confirming disallowance of Rs.2,50,000/- out of Telephone and Vehicle running and maintenance expenses on alleged grounds.
Sarwottam Ispat Ltd 12. For that the aforesaid disallowances so made by the A.O. without pin pointing any defects and the Ld. CIT (A) erred in confirming the same on alleged grounds. 13.For that, without prejudice, the aforesaid disallowances are otherwise high and/or excessive.
For that the appellant craves leave to amend, alter, modify, substitute, add to, abridge and/or rescind any or all of the above grounds. During the course of hearing, the ld. AR only pressed Ground 5. Nos.6, 7 & 8. The ld. AR submits that the ld. CIT(A) erred in confirming the disallowance of Rs.20,00,000/- on account of payment of wages on the ground that no documentary evidence has been filed by the assessee in the course of appellate proceedings. The ld. AR has filed balance sheet tariff order which establishes the case of the assessee. The ld. AR further submits that the ld. CIT(A) has further dismissed the Ground No.8 of the assessee on the ground that the assessee did not submit any documentary evidence. The prayer of the ld. AR is that the matter be remitted back to the file of the ld. CIT(A) for fresh consideration.
On the other hand, the ld. DR did not raise any objection in remitting the appeal of the assessee back before the ld. CIT(A).
Upon hearing the submissions of the counsels of the respective parties, we are going to decide Ground Nos.6, 7 & 8 Only and other grounds are hereby dismissed as it has not been pressed by the assessee.
Ground Nos.6 & 7 are common and by going over the order of the ld. CIT(A), we find that the Assessing Officer made disallowance of Rs.20,00,000/- towards payments of wages for manufacturing expenses on estimate basis. The ld. CIT(A) has confirmed by stating that the assessee did not produce any documentary evidence in support of the contention though the burden lies on the assessee. The submission of Sarwottam Ispat Ltd the ld. AR is that disallowance on estimation basis cannot be made. So far as Ground No.8 is concerned, the ld. CIT(A) has again dismissed this ground by stating that the assessee did not produce documentary evidence in support of its claim. Before us, the ld. AR submits documents.
8. Keeping in view the order passed by the ld. CIT(A), we are inclined to restore the appeal before the ld. CIT(A) with a direction to pass order after providing an opportunity to the assessee of hearing and on perusal of the documentary evidence only on the Ground Nos.6, 7 & 8. It is also pertinent to mention here that the ld. CIT(A) shall pass an order not only the factual aspect rather on the basis of legal proposition especially on Ground No.6 & 7.
In the result, the appeal of the assessee is partly allowed for statistical purposes.
Kolkata, the 12th September, 2025.