TRACO ENTERPRISES,KOLKATA vs. ADIT (CPC), BANGALORE, BANGOLORE

At the outset, ld. Counsel for the assessee submitted that the alleged addition for contingent sales tax liability of Rs.15,88,966/- is not justified as the same has not been routed through the Profit & Loss Account. On the other hand, ld. D.R. failed to controvert this fact. (A.Y. 2020-21) Traco Enterprises 3. I have heard the rival contentions and perused the relevant material placed before me. I find that the Centralised Processing Centre while processing the return of the assessee for A.Y. 2020-21 made an addition for contingent sales tax liability at Rs.15,88,966/- on the basis of the observation of the Tax Audit report of the assessee furnished in Form 3CD by the auditor. As submitted by the ld. Counsel for the assessee, rectification application was filed stating that the tax auditor inadvertently filled that column and the same was rejected. Appeal before the ld. CIT(Appeals) on this issue also did not bring any relief to the assesese. Ld. Counsel for the assessee took me through the audited financial statement. On perusal of page 4 of the paper book, which shows the manufacturing, trading and Profit & Loss account for the year ended on 31.03.2020 and I find that no such expenditure in respect of contingent sales tax liability at Rs.15,88,966/- has been debited in the Profit & Loss Account. This fact stands uncontroverted by the revenue authorities. Under these facts and circumstances, where the alleged sum has not been claimed as expenditure in the books of account, disallowance made in the on-line processing is not justified. I, therefore, set aside the order of ld. CIT(Appeals) and delete the addition made for contingent sales tax liability.