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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI
आदेश/ O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by order of first appeal dated 28.01.2025 passed by learned Commissioner of Income-Tax (Appeals)-Addl/JCIT(A)-1, Gurugram [“CIT(A)”] which in turn arises out of rectification-order dated 17.06.2023 passed by learned CPC, Bengaluru [“AO”] u/s 154 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2017-18, the assessee has filed this appeal.
Precisely stated the facts of case are such that the assessee-company filed its return of income of AY 2017-18 declaring a total income of Rs.
Page 1 of 8 1,29,02,563/-. The AO processed assessee’s return vide intimation dated 09.03.2018 u/s 143(1) accepting the returned income of Rs. 1,29,02,563/-.
However, subsequently, the AO made a series of rectifications through orders dated 05.09.2018, 06.06.2023, 17.06.2023 and 01.03.2024 and kept on enhancing taxable income of assessee from time to time. Although assessee filed requests to AO and other authorities of department but did not get relief. Ultimately, the assessee selected appellate route and filed appeal to CIT(A) against order dated 17.06.2023 by which the assessee’s income was enhanced to Rs. 2,65,57,660/- after making certain adjustments. The CIT(A) granted part-relief to assessee. Still aggrieved, the assessee has come in next appeal before us.
The grounds raised by assessee are as under:
“1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED ASSESSING OFFICER (CPC) HAS ERRED IN PASSING THE ORDER WITHOUT FOLLOWING THE PROCEDURE LAID DOWN U/S 154(3)/154(4). 2.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED IN NOT ADJUDICATING THE LEAGAL GROUND RELATING TO PASSING OF ORDER U/S 154 WITHOUT ANY OPPORTUNITY BY BEING HEARD AND TREATING THE SAME AS GENERAL IN NATURE. 3.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED ASSESSING OFFICEF (CPC) AS WELL AS LEARNED CIT(A) HAS ERRED IN DISALLOWING/MAINTAINING Rs.2,59,581 BEING SUBSCRPTIONS AND FEES WITHOUT GOING INTO THE FACTS OF THE CASE. 4.ON THE FACTS AND IN THE CIRCUMSTANCESOF THE CASE THE LEARNED ASSESSING OFFICER (CPC) AS WELL AS LEARNED CIT(A) HAS ERRED IN MAKING/MAINTAINING THE DISALLOWANCE OF Rs.3,85,448 BEING EXPENDITURE U/S 43B, WHICH HAVE ALREADY DISALLOWED IN COMPUTATION OF TOTAL INCOME AND DISALLOWANCE HAS RESULTED IN DOUBLE ADDITION OF THE SAME.
5.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED ASSESSING OFFICER (CPC) AS WELL AS LEARNED CIT(A) HAS ERRED IN MAKING/MAINTAINING THE DISALLOWANCE OF Rs.2,19,945 BEING AMOUNT OF BAD DEBTS CLAIMED IN THE RETURN, WHEN ALL THE DETAILS WERE PROVIDED.”
Ground No. 1 & 2:
These are legal grounds but Ld. AR for assessee submitted that the assessee would be satisfied if due relief is given in other grounds which are on merits. Considering this request of Ld. AR and in view of the fact that the assessee is getting relief in other grounds in subsequent discussions, these grounds are not being adjudicated.
Ground No. 3:
The issue involved in this ground is the disallowance of Rs. 2,59,581/- made by AO. This disallowance has been picked by CPC on the basis of reporting made by auditors in Clause 21(a) with the caption “Member Fees”.
The assessee has filed details and documentary evidences of these expenses at Pages 187 to 197 of Paper-Book. On perusal of these documents in open court, we prima facie find that the expenses are in the nature of membership fee paid to various trade associations and subscriptions. There appears no element of charity or donation. The expenses appear to have been incurred for business purposes and allowable. Therefore, as per consensus reached by learned Representatives, we remand this issue back to the file of AO for a fresh adjudication after considering evidences of assessee. Needless to Page 3 of 8 mention that the AO shall give necessary opportunity to assessee and shall make a judicious adjudication taking into account evidences of assessee without being influenced by previous orders in any manner. Consequently, this ground is allowed for statistical purpose.
Ground No. 4:
The issue involved in this ground is the disallowance of Rs. 3,85,448/- made by AO pertaining to provision of leave encashment. The AO has made this disallowance u/s 43B. Ld. AR for assessee, however, filed “Computation of Total Income” at Page 17 of Paper-Book to demonstrate that the assessee has voluntarily made disallowance in the returned income of Rs. 1,29,02,563/- computed before filing return of income. The document referred by Ld. AR is scanned and re-produced below for an immediate reference:
From above document, it is very much apparent that the assessee has already made the requisite disallowance before filing return of income.
Therefore, the addition/disallowance of Rs. 3,85,448/- made by AO has resulted in double addition. In that view of matter, we direct the AO to delete the impugned addition. Consequently, this ground is allowed.
Ground No. 5:
The issue involved in this ground is the disallowance of Rs. 2,19,945/- made by AO on accounts of “bad debt”. This disallowance has been picked by CPC on the basis of information of “bad debts” filed by assessee in the return of income as under [Para 5.6.1 of CIT(A)’s order]:
39 Bad debts (specify PAN of the person it available, for whom bad debt for amount of Rs.1 lakh or more is claimed as amount) i PAN Amount ii Others (more than Ii 219945 Rs.1 lakh) where PAN is not available iii Other (amounts Iii 0 less than Rs.1 lakh)
Page 6 of 8 iv Total bad debt iii 0 (39i) (All PAN) +39ii+39iii
Ld. AR for assessee submitted that the assessee has, due to oversight, wrongly filled information of “bad debts” of Rs. 2,19,945/- against sub-item (ii) of item 39 “Others (more than Rs. 1 lakh) where PAN is not available”.
However, the PAN data are available with assessee and therefore no disallowance is warranted. The assessee has filed a Sheet giving details of PAN data alongwith Ledger A/cs of concerned debtors at Pages 218-220 of Paper-Book. We re-produce below the details filed by assessee as under:
D
After deliberations on the issue and as per consensus reached by learned Representatives, we remand this issue also back to the file of AO for a fresh adjudication after considering evidences of assessee. Needless to mention that the AO shall give necessary opportunity to assessee and shall make a judicious adjudication taking into account evidences of assessee without being influenced by previous orders in any manner. Consequently, this ground is allowed for statistical purpose.
Resultantly, this appeal is allowed in terms mentioned above.
Order pronounced in open court on 29/08/2025