U.P. RAJYA CHINI AVAM GANNA VIKAS NIGAM LTD.,,LUCKNOW vs. DCIT, RANGE-VI, LUCKNOW

The issue raised by the assessee in the present appeal relates to addition of Rs.57,72,174/- on account of expenditure disallowed u/s. 43B of the Act, though the same have been already disallowed over the past years as claimed by the assessee.

Brief facts of the case are that the assessee is a U.P. Government undertaking engaged in the business of manufacturing and trading of sugar. Return of income was filed on 30.9.2012 reporting a loss for the current year at Rs.1,75,86,903/-. In the course of assessment, ld. AO noted vide Annexure H-1, the Auditor has reproted the expenditure disallowable u/s. 43B of the Act at Rs.57,72,174/-. Ld. AO sought explanation on the same against which assessee furnished the reply stating that this amount has already been disallowed by the assessee and added to its return of income in the past several years. However, not accepting the submission of the assessee, ld. AO proceeded to complete the assessment by making a disallowance of the said amount u/s. 43B of the Act. Aggrieved, assessee went in appeal before the ld. CIT(A), who upheld the disallowance so made by the ld. Assessing Officer.

Aggrieved, assessee is in appeal before the Tribunal. Before us, Shri Samrat Chandra represented for the assessee and Shri Amit Nigam represented by the Department.

At the outset, ld. Counsel for the assessee pointed out to the defect noted by the Registry in respect of appeal fee challan, wherein the minor head is not correctly used. The said defect has been rectified by furnishing a new challan in this respect placed on record. Ld. counsel further referred to a paper book containing total 32 pages, wherein Annexure H-1 relied upon by the ld. AO is placed on record at pg. 25. The said Annexure is reproduced hereunder:

Ld. Counsel explained the contents of the said annexure by submitting that Column-3 contains the opening balance and Columns No. 4 and 5 are the provision and the adjustment made in the year under consideration. Columns No.6 thus the represents the submission of three columns from 3 to 5. Column Nos. 7 and 8 representing the amount paid during the year against the opening liabilities and against the current year. He thus clarified that the Column-11 which is titled as amount disallowable with the total amount of Rs.57,72,174/- is the aggregate of past several years since this is arrived at by taking into consideration, the opening balance stated in Column-3 and adjustments being made year on year basis. He thus contended that this amount which ld. AO has disallowed on a mistaken understanding represents the amount which have been disallowed by the assessee itself in the past several years. The disallowance made by the ld. AO by resorting to the disclosure made by the tax auditor in compliance to the requirement of the prescribed format of the tax audit report is leading to disallowance twice, which is not warranted under the provisions of the Act. Upon specific query from the Bench to the ld. Counsel if the bifurcations can be submitted year wise for this amount of Rs.57,72,174/-, it was stated that the details can be furnished and examined by the ld. AO for which the matter may be remitted back to the file of the ld. AO.

Ld. Sr. DR did not raise any objection on the said submission of the ld. counsel.

Considering the facts and circumstances of the case and the submissions made along with the paper book on record, we find it proper to remit the matter back to the file of the AO in terms of the request made by the ld. counsel before the assessee would submit the details of the amount of Rs.57,72,174/- giving year wise brake up as to how in each year the amount was suo moto to disallow by the assessee in its computation of total income. The ld. AO is directed to verify the same in accordance with the provisions of Section 43B of the Act and consider the disallowance accordingly.

In the result, appeal of the assessee is allowed for statistical purposes.