BLOOM SEAL CONTAINERS PVT LTD ,MUMBAI vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRALIZED PROCESSING CENTRE IT DEPT , BANGALORE

Appellant by : Shri Kirit Kamdar Respondent by : Shri Himanshu Kumar Date of Hearing 16.05.2024 Date of Pronouncement 31.05.2024 आदेश / O R D E R PER RENU JAUHRI [A.M.] :-

This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai-12/National Faceless Appeal Centre [NFAC] [hereinafter referred to as “CIT(A)”] dated 26.05.2023 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for the Assessment Year [A.Y.] 2017- 18. 2. The assessee has raised following grounds of appeal:

P a g e | Bloom Seal Containers Pvt. Ltd. Ground No. 1 : Double disallowance provision for gratuity under section 43B of the Act and 40A(7) of the Act 1.1 On the facts and circumstances of the case and in law, the Commissioner of Income-tax (Appeal)-national Faceless Appeal Centre –(NFAC) [The CIT(A)] has erred in upholding the action of the Centralized Proceesing Centre (CPC) in making further disallowance on account of variance of Rs. 18,98,167/- between the disallowance reported under section 43B of the Act at Rs. 32,52,491/- as per the tax audit report viz a viz Rs. 13,54,324/- as per the return of income on the alleged ground that the claim of the Appellant is after thought and hence the same is not allowable. 1.2 In doing so, the CPC and CIT(A) failed to appreciate the fat that the provisions for gratuity has already been separately disallowed under section 40A(7) of the Act in the return of income and therefore, making further disallowance under section 43B of the Act on account of such variance has resulted in double disallowance of the same amount in two different sections. 1.3 In doing so the CIT(A) ignored the certificate issued by the tax auditor duly certifying the correct amount of disallowance instead of the amount erroneously reported in the original tax audit report. 1.4 The appellant, therefore, prays that the disallowance made of Rs. 18,98,167/- be deleted. Ground No. 2 : Short allowance of expenditure claimed under section 43B of the Act. 2.1 On the fact and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the CPC in allowing only Rs. 9,28,200/- being amount of disallowance made in earlier years but allowable in the previous year under section 43B of the act as per tax audit report instead of allowing Rs. 9,89,372/- as claimed in the return of income and thereby allowing short deduction of Rs. 61,172/- on the alleged ground that the claim of the appellant is after thought and hence the same is not allowable. 2.2 In doing so the CIT(A) ignored the certificate issued by the tax auditor duly certifying the correct amount of allowance P a g e | Bloom Seal Containers Pvt. Ltd. instead of the amount erroneously reported in the original tax audit report. 2.3 The appellant, therefore, prays that the correct amount of allowance of Rs. 9,89,372/- be allowed. Without prejudice to ground Nos 1 and 2 above, Ground No. 3 : Non allowance of set off of MAT credit: 3.1 On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the CPC in not allowing set off available tax credit under section 115Jaa of the Act (MAT Credit) against the tax payable on the income assessed under section 143(1) of the Act. 3.2 .The appellant, therefore, praywes that tax credit under section 115JAA be allowed to be set off against the tax payable on the assessed income under section 143(1) of the Act. Ground No. 4 : Levy of Interest under section 234 of the Act. 4.1 On the facts and in the circumstances of the case in law, the CIT(A) erred in upholding the action of the CPC in levying interest under section 234C of the act. 4.2 the appellant, therefore, prays that interest levied under section 234C of the Act be deleted. 3 Brief matter of the case are as under: i. The assessee had filed return of income on 07.11.2017 declaring income of Rs. 3,94,59,020/-. Tax was paid on deemed income u/s 115JB calculated at Rs. 5,03,34,400/-. The case was processed u/s 143(1) dated 27.12.2018 by the Centralized Processing Centre, Bengaluru [CPC] wherein addition amounting to Rs. 19,95,339/- was made. Even though in response to the communication received from the CPC regarding proposed adjustment, the assessee had submitted his disagreement to the proposed addition. ii. Aggrieved with the CPC’s order, the assessee filed an appeal before the Ld. CIT(A)/NFAC on 08.03.2019. Vide order dated 26.05.2023, the Ld. CIT(A) dismissed the assessee’s appeal.