GANDHAR OIL REFINERY (INDIA) LIMITED,MUMBAI vs. CC 5(1), MUMBAI

सुनवाई क� तार�ख/Date of Hearing 17.09.2024 घोषणा क� तार�ख/Date of Pronouncement 19.09.2024 ORDER PER PAVAN KUMAR GADALE, JM:

The appeal is filed by the assesse against the order of Commissioner of Income Tax (Appeals) CIT(A))-53, Mumbai passed u/sec 143(3) and u/sec 250 of the Act. The assessee has raised the following grounds of appeal:

1. On the facts and circumstances of the appellant's case and in law, Ld. CIT (A) erred in confirming the action of Ld. AO of disallowing the deduction claimed u/s 35(2AB) of the Act to the extent of Rs. 19,21,303/- for the reasons stated in the impugned order or otherwise.

2. On the facts and circumstances of the appellant's case and in law, the ld. CIT(A) erred in confirming the action of Ld. AO of Gandhar Oild Refinery (Ind) Ltd, Mumbai disallowing the deduction claimed amounting to Rs. 17,278/- on account of delay in payment of contribution to ESI by invoking provisions of section 2(24)(x) r.w.s. 36(1)(va) of the Act.

3. On the facts and circumstances of the appellant's case and in law, the ld. CIT(A) erred in confirming the action of Ld. AO of disallowing the claim of advances written-off of Rs. 4,88,070/- by arbitrarily holding that provisions of section 36(2) of the Act have not been complied with for the reasons mentioned in the impugned order or otherwise..

2. The brief facts of the case are that, the assessee company is engaged in the business and has filed the return of income for the A.Y 2016-17 on 29.11.2016 disclosing a total income of Rs.12,27,87,970/- and the return of income was processed u/s 143(1) of the Act. Subsequently the case was selected for complete scrutiny under CASS and notice u/sec 143(2) and u/sec 142(1)of the Act are issued. Since the assesse has specific domestic transactions and the international transactions with its Associate Enterprises as per Form.No.3CEB, the Assessing Officer (AO) has referred the matter to Transfer Pricing Officer (TPO) for determination of arm’s length price (ALP). Whereas the DCIT(TP) has accepted the ALP of the assesse and no adjustments are made for specific domestic transactions and the international transactions. The AO on perusal of financial statements, found that the assesse has claimed deduction u/sec 35(2AB) of the Act, and called for details of capital and revenue expenditure and the assesse has submitted the information, but the AO considering the facts and information find that the R&D Expenses of Rs.19,21,303/- is not approved by the Gandhar Oild Refinery (Ind) Ltd, Mumbai DSIR in the 3CL report and was disallowed. The second disputed issue with respect to ESI, the AO found that the assessee has not paid/deposited the employees contribution of ESI within the due date prescribed under the Act and made disallowance of Rs.17,278/- and the last disputed issue is with respect to advances written off by the assesse in the profit and loss account, the AO found that the assesse has written off advances but there is no clarity on the facts and details of such persons and same was treated as bad debts, whereas the A.O was not satisfied with the explanations and made disallowance of Rs.4,88,070/-.Finally the A.O has assessed the total income of Rs.12,52,14,621/- and passed the order u/sec 143(3) of the Act dated 24.12.2019.