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Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy & Sri S. S. Godara
Appearances by: Shri S.K. Pransukha, A/R, appeared on behalf of the assessee. Shri P.K. Srihari, CIT, D/R. appearing on behalf of the Revenue. Date of concluding the hearing : November 28th, 2019 Date of pronouncing the order : December 31st , 2019 ORDER Per J. Sudhakar Reddy, AM :- These are cross-appeals directed against the order of the against the order of the Learned Commissioner of Income Tax (Appeals) – 4, Kolkata, (hereinafter the “ld.CIT(A)”), passed u/s. 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 21/12/2017, for the Assessment Year 2011-12.
The assessee is a public sector undertaking (PSU) and filed its return of income for the Assessment Year 2011-12 on 23/09/2011, declaring total loss of Rs.29,09,69,900/- under the normal provisions of the Act and computed book loss of 2 Assessment Year: 2011- Assessment Year: 2011-12 Hindustan Steelworks Construction Limited Rs.67,73,50,700/- u/s 115JB of the Act. The ld. Counsel for the assessee, brought to the notice of the Bench that the grounds of appeal
are not concise and precise as required under the Income Tax (Appellate Tribunal) Rules, 1963 and hence, he filed the following revised ground of appeal:- “The Ld. CIT(A) has erred in confirming the disallowance of Rs.3.7 cr being 30% out of general charges 12.73 cr on ad hoc basis without appreciating that all expenses are incurred for business purpose.”
3. After hearing rival contentions, we find that the assessee is a PSU and the adhoc disallowance made by the Assessing Officer as confirmed by the ld. CIT(A) is totally unwarranted and based on surmises and conjectures. Just because the assessee has incurred huge loss, during the year, and just because the expenses under the head general charges had increased during the year, it does not lead to the conclusion that an adhoc disallowance can be made. Hence, we delete the same and allow this ground of the assessee. In the result, the appeal of the assessee is allowed.
4. We now take up the appeal of the revenue in ITA No. 388/Kol/2018.
5. Ground No. 1 is on the issue of violation of Rule 46A of the Income Tax Rules, 1962 (‘Rules’), by the ld. CIT(A). We find no such violation. The assessee had not claimed deduction in its computation of income on provisions made and similarly, when such provisions were written back, it had not offered the same as income. Thus, at para 4 page 3 of the order, the ld. CIT(A) deleted the addition. We find no infirmity in the same. Hence, this ground of the assessee is dismissed.
6. Ground No. 2 is on the issue of disallowance of unpaid cess u/s 43B of the Act. The ld. CIT(A) records a factual finding that the assessee has not claimed a deduction of this amount and hence, the question of disallowance u/s 43B of the Act does not arise. We find no infirmity in this finding and hence dismiss ground no. 2 of the revenue.