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Income Tax Appellate Tribunal, “B” BENCH, PUNE
BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND G.D. PADMAHSHALI, ACCOUNTANT MEMBER (Assessment Year: 2017-18) M/s. Phoenix Mecano (India) DCIT, Circle - 4 Pvt. Ltd. Swargate, Pune 388/389, Bhare, Taluka Mulshi Vs. Pirangut Indusrial Area Pune 412115 PAN –AAACP2452L Appellant Respondent Appellant by: Shri Sharad Shah Respondent by: Shri M.G. Jasnani Date of Hearing: 18.08.2022 Date of Pronouncement: 26.08.2022 O R D E R
Per S.S. Godara, JM
This assessee’s appeal for AY 2017-18 is against the CIT(A) NFAC, Delhi’s order dated 05.09.2021 passed in case No. CIT (A), Pune-3/10127/2018-19 involving proceedings under Section 143(1) of the Income Tax Act, 1961 (in short the Act).
2. The assessee raised the following substantive grounds in the instant appeal: - “1. The Ld. CPC erred in & Ld. CIT (A) erred in confirming the disallowance of Rs.1,25,67,263/- u/s 43B of the Income Tax Act.
The Ld. CIT (A) erred in not appreciating the fact that the amount disallowed u/s 43B was never allowed as deduction in earlier year and thus in any case not taxable in AY 2017-18.
3. Alternatively amount of Rs.1,22,08,808/- ought to have been added in view of Sec. 41(1). Reversal of unallowed provision cannot be added u/s 41(1).
It emerges at the outset that the instant issue of 43B disallowance comprises of various heads of leave encashment, gratuity, bonus and VAT etc. hardly requires us to delve deeper in the relevant factual matrix. Suffice to say,
M/s. Phoenix Mecano (India) Pvt. Ltd. it emerges from a perusal of the assessee’s paper book at page 35 that it had carried forward all these four heads of liabilities from preceding assessment year to the relevant previous year. It thereafter appears to have paid actual sum of Rs.3,58,455/- leaving behind the net figure of Rs.1,22,08,808/- representing the amounts written back as per its schedule of liabilities. It further transpires from a perusal of assessee’s Form 3CD (page 87) that this assessee had clarified the impugned sum as not paid and liable to be disallowed under Section 43B of the Act in relevant column 26 thereof.
Learned D.R. could hardly rebut the fact that this issue of Section 43B disallowance leads to double addition in these peculiar circumstances which requires more a factual reconciliation than any substantive adjudication on our part. Faced with this situation, we deem it appropriate to restore the assessee’s instant sole substantive grievance back to the Assessing Officer to verify all the relevant factual aspects afresh and disallow the correct amount of assessee’s unpaid dues u/s. 43B of the Act as per law in consequential proceedings. Ordered accordingly.
This assessee’s appeal is partly allowed for statistical purposes in above terms.