Loading judgment…
Facts
The assessee's appeal was against the order confirming an addition of Rs. 2,19,075/- related to liabilities written back. The assessing officer made this addition based on auditor's observations while processing the income tax return.
Held
The Tribunal noted that the amount of Rs. 2,19,075/- was already included under 'other income' as per Note 21 of the audited accounts. Therefore, any further addition would amount to double addition.
Key Issues
Whether the addition of Rs. 2,19,075/- relating to liabilities written back, which was already included in 'other income', constitutes double addition.
Sections Cited
Section 25(iii) of the auditor's report
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYA, HON’BLE & SHRI RAHUL CHAUDHARY, HON’BLE
PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the assessee is preferred against the order of the Addl/JCIT(A)-1, Chandigarh dt. 19/01/2024, pertaining to Assessment Year 2021-22. 2. The solitary grievance of the assessee is that the ld. CIT(A) erred in confirming the addition of Rs.2,19,075/- relating to liabilities written back.
Briefly stated, the facts of the case are that while processing the return of income, the CPC, Bengaluru, drawing support from the observations made by the auditor, made the addition of Rs.2,19,075/- relating to liabilities written back to the extent no longer required. Assessment Year: 2012-13 Pukhraj Jain HUF 2
Before the ld. CIT(A), the assessee strongly contended that, though the auditor has reported the issue at Clause 25(iii) of the report but the said amount has already been included in the net profits as disclosed in the profit and loss account. Though the ld. CIT(A) was convinced that the said addition has been made solely on the basis of remark of the auditor but could not find the bifurcation/details of the amount of Rs.10,89,643/- under the head “any other income” and, therefore, confirmed the addition.
Before us, the ld. Counsel for the assessee drew our attention to the profit and loss account and pointed out that the other income has been show at Rs. 2,44,73,599/- and the details of which are given in the schedule 21, which shows that this income includes other non- operating income of Rs.10,89,643/- which has been further bifurcated as under:-
FLP Trading Pvt Ltd Assessment Year 2021-22
The statement giving details of other income – Note 21 of Audited Accounts
Particulars Amount Amount Interest income on bank deposits 2,32,62,395 Interest on income tax refund 1,21,561 Other non operating income Scrap Sale 2,50,954 Net-Sundry Balance Written Off Income 2,19,075 Short/Excess Provision 1,81,930 Claimed Amount Written Back 1,70,875 Invoice Cancellation Charges 1,30,718 Unclaimed Amount Written Off 1,14,461 Shrot/Excess Cash Receipt 11,629 Duplicate Invoice Copy Charges 10,000 10,89,643 Total 2,44,73,599 Assessment Year: 2012-13 Pukhraj Jain HUF 3
The ld. Counsel for the assessee pointed out that Rs.2,19,075/- has been included in ‘other income’.
We have given a thoughtful consideration to the factual matrix explained and discussed hereinabove. We find force in the contention of the ld. Counsel for the assessee. Under Note -21 of audited accounts, the assessee has shown other income at Rs. 2,44,73,599/- and the details of other income are exhibited elsewhere which clearly shows that income of Rs.2,19,075/- is already included. Therefore, any other addition would tantamount to double addition and hence we direct the AO to delete the addition.
In the result, appeal of the assessee is allowed.
Order pronounced in the Court on 9th July, 2024 at Mumbai. (RAHUL CHAUDHARY) ACCOUNTANT MEMBER Kolkata, Dated 09/07/2024 *SC SrPs *SC SrPs *SC SrPs *SC SrPs Assessment Year: 2012-13 Pukhraj Jain HUF 4
आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : अपीलाथ" / The Appellant
""थ" / The Respondent 2. संबंिधत आयकर आयु" / Concerned Pr. CIT 3. आयकर आयु" अपील
( ) / The CIT(A)- िवभागीय "ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 5. गाड" फाई/ Guard file. 6. आदेशानुसार/ BY ORDER,