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Facts
The assessee's income tax return for AY 2023-24 was assessed by AO/CPC, who added Rs. 5,51,81,527/- for liabilities written back and Rs. 3,90,829/- for ICDS adjustment. The Ld. CIT(A) upheld the addition for liabilities written back but deleted the ICDS adjustment, leading the assessee to appeal against the confirmed addition.
Held
The Tribunal ruled that the disputed amount of Rs. 5,51,81,527/-, representing liabilities written back, had already been credited and offered to tax in the profit and loss account. The Tribunal concluded that the addition made by CPC under Section 41(1)(a) was an erroneous double addition and directed its deletion.
Key Issues
Whether the addition of Rs. 5,51,81,527/- for liabilities written back under Section 41(1)(a) by the CPC constituted a double addition when the amount was already credited to the profit and loss account and offered to tax.
Sections Cited
41(1)(a)
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Income Tax Appellate Tribunal, “A” BENCH: KOLKATA
Before: Shri Pradip Kumar Choubey&Shri Rakesh Mishra]
ORDER / आदेश Per Pradip Kumar Choubey, JM:
This is the appeal preferred by the assessee against the order of Ld. Commissioner of Income Tax (Appeals)- Addl/JCIT(A)-4, Delhi (hereinafter referred to as the Ld. CIT(A)] dated 06.11.2024 for AY 2023-24.
Assessment Year: 2023-24 Star Paper Mills Ltd. 2. Brief facts of the case of the assessee are that the assessee filed its return of income for AY 2023-24 declaring total income of Rs. 85,01,46,040/- under the normal provision of the Act. The AO/CPC assessed the total income of the assessee at Rs. 90,57,18,400/- after making addition of Liabilities written back at Rs. 5,51,81,527/- and an amount of Rs. 3,90,829/- double addition made on account of the ICDS adjustment.
Aggrieved by the said order the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been partly allowed as the Ld. CIT(A) has confirmed the order of AO with respect to addition of Rs. 5,51,81,527/- under liabilities written back but deleted the addition on account of ICDS adjustment.
Being aggrieved and dissatisfied the assessee preferred an appeal before us.
The Ld. A.R challenges the very impugned order thereby submitting that the Ld. CIT(A) failed to appreciate that the impugned sum had already been credited as offered to tax in the profit and loss account and therefore the addition of Rs. 5,51,81,527/- made by CPC amounting to double addition of the same sum. Hence, the authority be directed to delete the same. He has brought to the notice of the tribunal on the audited financial statement submitted in PB. He has also submitted the chart before us to prove the same.
Contrary to that the Ld. D.R supports the impugned order.
Upon hearing the submission of the counsel of the respective parties, we have perused the order of Ld. CIT(A). The sole grievance in this appeal relates to disallowance of Rs. 5,51,81,527/- made by CPC. The submission of the Ld. Counsel of the assessee is that during the year under consideration the company had credited Rs. 6,02,76,922/- as provision of liability no longer required written back as reflected in the note no. 24 “other income” of the audited financial statement filed by the assessee at page 15. The assessee has filed the breakup of the sum of Rs. 6,02,76,922/- credited in the profit and loss account which is herein below:
On perusal of the above chart it appears to us that the amount of Rs. 5,51,81,527/- already formed part of profit and loss account and has already been offered to tax under the head profit and gain from the business and profession. The relevant extract of the Schedule Part A-P & L Ind-As which is as under:
Going over the chart as well as submission made by the assessee we are of the view that CPC had erroneously made adjustment of Rs. 5,51,81,527/- u/s 41(1)(a) of the Act without appreciating the fact that the same was already credited and offered to tax in the profit and loss account. We find substance in the argument of the Ld. Counsel of the assessee is that impugned addition amounted to double addition. Accordingly, the appeal of the assessee is hereby allowed and addition of Rs. 5,51,81,527/- as liability returned back is hereby directed to be deleted.