RITESH KUMAR BOYED,KOLKATA vs. ITO, WARD - 42(3), KOLKATA, KOLKATA

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ITA 2523/KOL/2017Status: DisposedITAT Kolkata25 May 2018AY 2007-083 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer's order was erroneous because the amount in question was not claimed as a deduction in the audited profit and loss account, thus disallowing it again would constitute a double disallowance.

What were the facts?

The assessee's appeal concerned an alleged double disallowance of Rs. 4,10,734.81, initially treated as loan processing fee. The Assessing Officer noted this amount was not in the audited profit and loss account.

What were the issues?

Whether the disallowance of an amount not debited in the profit and loss account, when already not claimed as a deduction, amounts to a double disallowance.

Which sections of the Income-tax Act were involved?

Section 154,Section 143(3),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA

Before: Sri J. Sudhakar Reddy]

order : May 25th , 2018 O R D E R Per J. Sudhakar Reddy :- This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals)-13, Kolkata, (hereinafter the ‘Ld. CIT(A)’), dt. 18/07/2017, passed u/s 250 of the Income Tax Act, 1961 (hereinafter the ‘Act’), confirming the order passed by the Assessing Officer u/s 154/143(3) of the Act, for the Assessment Year 2007-08.

2.

After hearing rival contentions, I hold as follows: The only issue before me is the arithmetical error committed while disallowing interest as loan processing fee of Rs.4,10,734.81/-, which resulted in double disallowance. I find that at page 4 last para, the Assessing Officer has specifically observed as follows:- “The amount of Rs.4,10,734.81/-, has not been incorporated in your audited profit and loss account.” 2.1. I find that the Assessing Officer has started the computation of income at page 5 of his order, by taking the net profit as disclosed in the profit and loss Assessment Year: 2007-08 Ritesh Kumar Boyed account of the business of the assessee i.e. Rs.6,52,338.83/-. It is not a case where the Assessing Officer had started the computation of income from the figure of income computed by the assessee under the head “income from business”. As the assessee admittedly has not claimed this amount in question as a deduction in its audited profit and loss account, the Assessing Officer in his order d. 29/12/2009 passed u/s 143(3) has not once again disallowed this amount in the computation as it would be a double disallowance. Thus, the order passed u/s 154 r.w.s. 143(3) of the Act, dt.04.07.2015, is erroneous.

3.

In the result, appeal of the assessee is allowed.

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