DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1), CHANDIGARH vs. GLAXOSMITHKLINE ASIA PVT LTD, GURGAON

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ITA 346/CHANDI/2024Status: DisposedITAT Chandigarh24 March 2025AY 2017-18Bench: SHRI RAJPAL YADAV (Vice President), SHRI MANOJ KUMAR AGGARWAL (Accountant Member)1 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the disallowance of Rs. 265.71 Lacs could not be disallowed again as it would amount to double addition, as the assessee had reversed the provision in the current year. Regarding the second issue, it found no grievance for the Revenue as the CIT(A) had directed verification.

What were the facts?

The Revenue appealed an order by the CIT(A) which deleted a disallowance of Rs. 265.71 Lacs that the assessee claimed was a reversal of a prior year's disallowance. The CIT(A) also directed verification of another disallowance of Rs. 326.67 Lacs concerning excise duty on opening and closing stock.

What were the issues?

Whether disallowance of a provision reversed in the current year amounts to double addition. Whether the Revenue has a grievance when CIT(A) directs verification of certain aspects.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 43B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, CHANDIGARH

Before: HON’BLE SHRI RAJPAL YADAV & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

(िनधा�रणवष� / Assessment Year: 2017-18) DCIT M/s Glaxosmithkline Asia Private Ltd. 10th Floor, Sector 43, DLF Phase V बनाम/ Chandigarh – 160017 One Horizon Centre, Golf Course Road Vs. Gurgaon-122002. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AABCS-3237-R (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Shri Ajay Vohra (Sr. Advocate) along with Shri Neeraj Jain (Advocate) & Ms. Somya Jain (CA) – Ld. ARs ��थ�कीओरसे/Respondent by : Shri Rohit Sharma (CIT) – Ld. DR सुनवाईकीतारीख/Date of Hearing : 05-03-2025 घोषणाकीतारीख /Date of Pronouncement : 24-03-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by Revenue for Assessment Year (AY) 2017-18 arises out of an order of learned Addl. / Joint Commissioner of Income Tax (Appeals)-2, Coimbatore [CIT(A)] dated 09-02-2024 in the matter of an order passed by Ld. AO on 13-09-2023. Having heard rival submissions and upon perusal of case records, the appeal is disposed- off as under.

2.

From the record, it emerges that the assessee filed return of income which was processed u/s 143(1) by CPC on 27-02-2019 wherein CPC made certain adjustment u/s 43B. Upon further appeal, Ld. CIT(A) partly allowed the appeal vide order dated 12-07-2023 with a direction to AO to verify certain aspects. The Ld. AO passed on order on 13-09-2023 and again confirmed the adjustments made u/s 43B. Aggrieved, the assessee preferred further appeal which was disposed-off vide impugned order dated 09-02-2024. Against the same, the revenue is in further appeal before us.

3.

Regarding disallowance of Rs.265.71 Lacs, the assessee submitted that the same represent amount reversed and credited to Profit & Loss Account out of disallowance made in preceding year. The assessee stated that disallowing the same again would amount to double addition. The Ld. CIT(A) accepted this fact and deleted the disallowance. Aggrieved, the revenue is in further appeal before us.

4.

The CPC made another disallowance u/s 43B for Rs.326.67 Lacs which represent difference between excise duty paid on opening stock and closing stock on the ground the same was not reported in Tax Audit Report Form 3CD. The assessee stated that it claimed net deduction of Rs.326.67 Lacs being the incremental difference between the excise-duty paid on 31-03-2017 and as on 31-03-2016 and therefore, the same would be an allowable deduction. The Ld. CIT(A) directed Ld. AO to allow the deduction on the basis of Tax Audit report and the assessee was directed to produce the relevant details. Aggrieved as aforesaid, the revenue is in further appeal before us.

5.

It is quite clear from the finding of Ld. CIT(A) that the deduction of Rs.265.71 Lacs was not allowed in earlier years u/s 43B. In this year, the provision has been reversed. Therefore, as rightly held by Ld. CIT(A), the same could not be disallowed again. Double addition / disallowance is impermissible.

6.

The another adjustment has arisen apparently due to discrepancies in the Tax Audit Report. We find that Ld. CIT(A) has merely issued directions to Ld. AO to verify the same with a direction to the assessee to substantiate the same. No grievance could be said to have arisen to revenue on this aspect.

7.

The appeal stand dismissed. Order pronounced on 24-03-2025.

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