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Income Tax Appellate Tribunal, “A” BENCH : KOLKATA
Before: Hon’ble Shri J.Sudhakar Reddy, AM & Hon’ble Shri S.S. Viswanethra Ravi, JM ]
ORDER Per J.Sudhakar Reddy, AM
This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals)- XXIV, Kolkata passed u/s 250 dated 31.12.2012 of the Income Tax Act, 1961(the ‘Act’) for the assessment year 2009-10.
The assessee is a public sector company and is in the business of trading of raw jute on the following grounds of appeal:
1. For that the Ld. CIT(A) was not justified in rejecting the claim made by the appellant vide its written submissions and also during the course of the hearing of the appeal for giving direction to the assessing officer to exclude the non- taxable amount from the income of the appellant which was included in the sum of Rs. 27839876 credited to the Profit & loss Account by way of Prior Period Adjustment on account of amount written back by the appellant out of provision for gratuity, when, such write back of provision for gratuity was not chargeable
The Jute Corporation of India Ltd. A.Yr.2009-10 to tax to the extent the amount represented expenditure disallowed in the assessment of earlier years u/s 40A(7) in view of the provisions contained in section 41 of the Income Tax Act.
2) For that the Ld. C.I.T (A) was unjustified in confirming the disallowance of Rs. 267917 made by the assessing officer u/s 40A (9) of] account of Rs. 64917· aid by the appellant to JCI Recreation & Welfare Club and Rs. 203000 paid to its Canteen, when, such expenses were in the nature of allowable staff welfare expenses outside the scope of disallowance provided in the said section.
3) For that the Ld. C.I.T (A), was not justified in rejecting the claim of RS.10932000 made by the appellant on account of provision for anticipated claims from its customers in the ordinary course of its business, by directing the assessing officer to, instead, allow deduction on the basis of claims actually paid during the year amounting to Rs. 6165976 only, though, the appellant had provided for such claims on a fair estimation basis permitted under the accrual basis of accounting being regularly followed by it.
4) For that the appellant craves leave to alter, modify or amend any of the above ground/s and to add further ground/s on or before the final hearing of this appeal.
We have heard Shri B. Syam, ld. Counsel for the assessee and Shri G. Mallikarjuna, the ld. CIT DR on behalf of revenue.
On a careful consideration and perused the material available on record. On the first ground we find that the Ld. CIT(A) held as follows: “2.2. During the course of appeal, the appellant has made the following submissions: The amount added back, being excess provision for gratuity in earlier years written back is not a prior period expenditure but is a prior period income duly credited to the profit and loss account and included in the returned income. Instead of adding back this amount, the assessing officer should have reduced the same from the returned income to the extent such unpaid provision for gratuity written back was already disallowed in assessment of earlier years, which was not chargeable under the provisions of section 41.”
The Jute Corporation of India Ltd. A.Yr.2009-10 The above shows that the issue was decided in favour of the assessee by the Ld. CIT(A). We find no reason for assessee to be aggrieved by this order of the Ld. CIT(A). On a quarry from the Bench, the Ld. counsel for the assessee submits that the Assessing officer is not passing consequential orders after receiving the order of the Ld. CIT(A). Such administrative grievances cannot be addressed by us. In view of the above discussion this ground is dismissed as misconceived.
Ground no.2 is on the disallowance made u/s 40A(9) of the Act. The Ld. CIT(A) at para 4.3 relied on the tax audit report and also the finding of the assessing officer and dismissed the contention of the assessee. Before us, the assessee could not controvert the factual finding of the Ld. CIT(A). Hence the same is dismissed.
Ground no. 3 is on the issue of rejecting the claim made by the assessee on account of ‘provision for anticipated claims from its customers’. The Ld. CIT(A) has observed at Para 5.3 of his order held as follows: “I have considered the above submission of the ld. AR and also gone through the assessment order. During the course of the appellate proceedings, the ld. AR has explained that the appellant has actually paid the amount of Rs. 61,65,976/- on account of short weight settled during the year out of the provisions for claims amounting to Rs. 1,09,32,000/- debited in profit and loss account. In view of the above, the AO is directed to delete the addition of Rs. 61,65,976/- out of the aforesaid addition of Rs. 1,09,32,000/- after verifying the contention of the appellant company that the amount of Rs. 61,65,976/- on account of short weight was actually paid during the year. This ground of appeal
is partly allowed.”
7. The assessee in this case was asked to produce details of claims adjusted with sales as well as other details such as possible claims discharged deducted from sales etc. The AO held that this is unascertained liability. Before us the assessee could not disprove finding of the AO that the claim is unascertained liability. The Ld. CIT(A) accepted the claim of the assessee to the extent that, the amounts actually paid during the year should be allowed as a deduction. We find no infirmity in this finding of the Ld. CIT(A). Thus ground no.3 is dismissed. 3
The Jute Corporation of India Ltd. A.Yr.2009-10
Ground no. 4 is general in nature and does not require any specific adjudication.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the Court on 27.06.2018