NEW KABLE POINT,THRISSUR vs. ITO, WARD-2(1), THRISSUR
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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Waseem Ahmed & Shri Soundararajan K
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Waseem Ahmed, Accountant Member & Shri Soundararajan K, Judicial Member ITA No.268/Coch/2024 :Asst.Year2018-2019 M/s.New Kable Point The Income Tax Officer Civil Lines Road Ward 2(1) v. Thrissur. Poothole, Thrissur – 680 004. PAN : AALFN4006E. (Appellant) (Respondent) Appellant by :Sri.C.Krishnakumar, CA Respondent by :Smt.Girly Albert, Sr.DR Date of Pronouncement : 30.09.2024 Date of Hearing : 24.09.2024 O R D E R Per Bench : This is an appeal filed by the assessee challenging the order of the NFAC/CIT(A) dated 06.02.2024 in respect of the assessment year 2018-2019.
Brief facts of the case are that the assessee filed its return of income and thereafter its case was selected for limited scrutiny and the Assessing Officer pointed out that the assessee had not deducted TDS and paid to the department and also the AO based on the Profit & Loss account disallowed the expenses in respect of the interest and penalty payment. The assessee challenged the said order before the ld.CIT(A) on the ground that the interest and penalty amounts are nothing but the amounts paid to the suppliers for the delay in making
2 ITA No.268/Coch/202\43. New Kable Point. payments and also delay in payment of sales-tax, and therefore, is an allowable expenses. The assessee further submitted that they had already disallowed 30% of the interest paid u/s.40 of the Act and also claimed that the assessee had also deducted 30% of the TDS amount for not deducting the same. The ld.CIT(A) without considering the submissions had dismissed the appeal by passing a non- speaking order, and therefore, the present appeal has been filed before this Tribunal, with the following grounds:- “1. The appellant firm had included the interest paid to suppliers and the interest paid to Bank and Sales tax Department amounting to Rs.3,35,961/- in the interest paid column of the Return of Income for the Asst. Year 2018-19 (column No44 of the Profit & Loss Account),though this amount was separately disclosed in Copy of the Profit Loss Account as Interest and Penalties. The interest paid disclosed in the Profit & Loss Account in the system clearly includes this amount. This includes the amount of Rs 3,10,160/ being interest paid to suppliers; Rs 5,869/,being amount of interest paid to Bank and the balance amount of Rs 19,931.53 ,being the interest paid to sales tax department. The CIT (Appeals) went wrong in not considering the details of disallowances made in the Total Income Statement, which includes thedisallowances of 30% Rs 3,10,160/,being the amount on which TDS had not been deducted, from the interest paid to suppliers. The disallowance amounts to Rs 93,048/, which had been clearly disallowed in the total income statement. The interest paid to bank and the sales tax department are allowable expenses. So, the additions of Rs 3,35,961/ made by the assessing authority and that retained by the CIT (Appeals) is against law and facts of the case and therefore unsustainable. 2. The appellant firm had already disallowed an amount of Rs 65,285/ under section 36 of the Act in the total income statement The assessing authority had again added an amount of Rs 65,285/ being the contribution of PF from employees not paid before the due date for paying the PF under section 36 of the Income Tax Act .Though a petition for rectification was filed before the CPC,CPC had directed the appellant firm to raise this contention before the assessing authority at the time of scrutiny .The learned CIT (Appeals)
3 ITA No.268/Coch/202\43. New Kable Point. failed to consider this, even though this contention was raised before the CIT (Appeals) 3. The appellant firm had an amount of Rs 4,87,484/ under TDS deducted but not paid before the due date for filing the return. The amounts involved in this relating to disallowances under the Act were already disallowed in the total income statement and though this aspect was also raised before the CIT (Appeals), he failed to consider this aspect also while disposing of the first appeal.” 3. At the time of hearing, the learned AR invited our attention to the written submissions filed by them before the ld.CIT(A) and prayed to allow the appeal since the same were not considered and a speaking order was not passed.
The learned DR relied on the orders of the lower authorities and prayed to dismiss the appeal.
We have heard both the sides and perused the material available on record. As seen from the records, it is the specific case of the assessee that the interest and penalty debited in the profit and loss account is already included in the return of income filed by the assessee. The learned AR also brought to our notice that the assessee had included the interest paid to the suppliers and the interest paid to the banks and to the sales-tax department amounting to Rs.3,35,961 in the interest paid column of the return of income and shown this amount separately in the profit and loss account as under the head “interest and penalties”. We find that the interest and penalty disclosed in the profit and loss account includes this amount also. Rs.3,10,160 being the interest paid to the suppliers and Rs.5,869 being the amount paid to the bank
4 ITA No.268/Coch/202\43. New Kable Point. and finally the balance amount of Rs.19,931.53 being the interest paid to the sales-tax department. The other contention in respect of the PF amount to be paid in time, we find that the assessee themselves had disallowed an amount of Rs.65,285 u/s.36 of the Act while computing income of the assessee. All the above said facts were raised by the assessee before the ld.CIT(A), but the ld.CIT(A) had simply extracted the facts, written submissions and finally gave a finding that the said expenses are not allowable under the provisions of the Act, and therefore, confirmed the addition made to the income of the assessee. We feel that the ld.CIT(A) had not verified the details submitted by the assessee and passed a speaking order. We, therefore, in the interest of justice, set aside the order of the ld.CIT(A) and remit the issue to the file of the ld.CIT(A) for deciding the issue afresh after hearing the assessee. 6. In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced on this 30th day of September, 2024. Sd/- Sd/- (Waseem Ahmed) (Soundararajan K) ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin ; Dated : 30th September, 2024. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT Concerned. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin
