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Facts
The assessee appealed against the NFAC order which upheld additions for profit on sale of depreciable fixed assets, difference in depreciation, and disallowance for late payment of ESI/PF. The assessee also challenged the adjustments made under Section 143(1) as debatable, contentious, or without jurisdiction.
Held
The Tribunal directed the Assessing Officer to recompute the profit on sale of fixed assets and allow depreciation as per the Income Tax Act. However, the ground pertaining to the disallowance of late ESI/PF payment was dismissed, relying on a Supreme Court judgment.
Key Issues
1. Whether additions for profit on sale of depreciable assets and difference in depreciation were correctly upheld by CIT(A) and made under Section 143(1). 2. Whether disallowance for late payment of ESI/PF under Sections 2(24)(x) read with Section 36(1)(va) was justified. 3. Whether adjustments made in the intimation under Section 143(1) were debatable, contentious, or without jurisdiction.
Sections Cited
143(1), 2(24)(x), 36(1)(va)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI
Before: Sh. Kul BharatDr. B. R. R. Kumar
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the assessee against the order of National Faceless Appeal Centre (NFAC), Delhi dated 12.11.2021. 2. Following grounds have been raised by the assessee:
“1 That the learned Commissioner of Income Tax (Appeals) National Faceless Appeal Centre has erred both in law and on facts in upholding addition of Rs. 1,80,735/- representing profit on sale of depreciable fixed assets as per Companies Act 2013 in an intimation dated 1.10.2019 u/s 143(1) of the Act. 2 That the learned Commissioner of Income Tax (Appeals) National Faceless Appeal Centre has further erred both in law and on facts in upholding addition of Rs. 2,54,740/- on account of difference in depreciation computed as per Income Tax Act and Companies Act 2013.
2 Agarwalla Teak International Pvt. Ltd. 2.1 That the learned Commissioner of Income Tax (Appeals) National Faceless Appeal Centre failed to appreciate that adjustment on account of difference in depreciation computed as per Income Tax Act and Companies Act 2013 has already been made by assessee while computing income from business or profession 3 That the learned Commissioner of Income Tax (Appeals) National Faceless Appeal Centre has also erred both in law and on facts in upholding disallowance of Rs. 2,26,692/- by invoking provision of section 2(24)(x) read with section 36(1)(va) of the Act. 4 That even otherwise the adjustments so made in the intimation u/s 143(1) of the Act are debatable and contentious issues and thus untenable. 5 That the learned Commissioner of Income Tax (Appeals) has also failed to appreciate that intimation dated 1.10.2019 was made without jurisdiction; and therefore deserves to be quashed as such.” Profit on sale of fixed assets – Rs.1,80,735/-: Difference in depreciation – Rs.2,54,740/-:
The CPC being an automated processing centre could not consider the differences in a correct way. The ld. CIT(A) affirmed the action of the CPC on the grounds that the assessee could not submit “proof” pertaining to inadvertent claim made by the assessee in the schedule-BP of column 5C and serial 25.
We have gone through the record and hereby direct the Assessing Officer to rightly compute the profit on sale of fixed assets and allow depreciation “as per the provisions of Income Tax Act” without any regard to the claim of the assessee wrongly made in the return.
3 Agarwalla Teak International Pvt. Ltd. Disallowance u/s 2(24)(x) r.w.s. 36(1)(va) –ESI/PF- Rs.2,26,692/-:
Relying on the judgment of Hon’ble Supreme Court in the case of Checkmate Services P. Ltd. vs. Commissioner Of Income Tax-I in CA No. 2833/2016 vide order dated 12.10.2022, this ground pertaining to late payment of ESI/PF is being dismissed.
In the result, the appeal of the assessee is allowed for statistical purpose. Order Pronounced in the Open Court on 28/06/2024.