ATC LOGISTICAL SOLUTIONS, NEW DELHI V. DEPUTY COMMISSIONER OF INCOME TAX - CPC-, BENGALURU

ITA 152/ASR/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0355 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 19-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Section: 143(3); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITS AR BENCH, AMRITSAR. BEFORE SH. LALIET KUMAR, JUDICIAL MEMBER AND DR. M. L. MEENA, ACCOUNTANT MEMBER I.T.A. NO. 152/ASR/2020 ASSES SMENT YEAR: 2017-18 ATC LOGISTICAL SOLUTIONS PVT. LTD., 3981/83, 1 ST FLOOR, NAYA BAZAR, NEW DELHI [PAN: AABCA 6200A] (APPELLANT) VS. DCIT-CPC-BENGALURU (RESPENDENT) APPELLANT BY SH. P. N. ARORA, ADV. RESPONDENT BY SMT. RATINDER KAUR, DR DATE OF HEARING 09.07.2021 DATE OF PRONOUNCEMENT 14.07.2021 ORDER PER LALIET KUMAR, J.M. THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 22.09.2020 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)- 1, AMRITSAR IN RESPECT OF A.Y. 2017-18. ITA NO. 152/ASR/2020 2 2. GROUNDS OF APPEAL: I. THAT THE ORDER OF THE ASSESSING OFFICER AS WELL AS THE ORDER OF LEARNED CIT(A) ARE BOTH AGAINST THE FACTS OF THE CASE AND A RE UNTENABLE IN LAW. II. THAT THE WORTHY CIT(A) HAS NOT APPRECIATED THE FACT S OF THE CASE AND MERELY RELIED ON ORDER OF THE AO AND WITHOUT ANY RHYME & REASON, THE LD. CIT(A) HAS CONFIRMED THE ADDITION OF RS.19,52,659/- AGAINS T THE DISALLOWANCE MADE BY THE CPC AT RS.22,59,445/- U/S 40A(7) OF THE IT ACT, 1961. AS SUCH ORDER OF THE CIT(A) IS ALSO LIABLE TO BE CANCELLED AND THE ADDITION CONFIRMED MAY BE DELETED. III. THAT THE LD. CIT(A) DID NOT APPRECIATE THAT DURING THE YEAR UNDER CONSIDERATION THE POSITION OF THE GRATUITY ACCOUNT IS AS UNDER:- PARTICULARS AMOUNT OPENING (A) RS.2,41,69,772/- EXPENSES DURING THE YEAR (B) RS.22,59,445/- PAID DURING THE YEAR (C) (-) CLOSING LIABILITY (D) RS.2,44,33,648/- A. THUS THE LD. CIT(A) DID NOT APPRECIATE THAT DURING THE YEAR UNDER CONSIDERATION THE APPELLANT HAS CLAIMED AN AMOUNT O F RS.22,59,445/- AS EXPENDITURE IN THE AUDITED PROFIT & LOSS A/C OUT OF WHICH AN AMOUNT OF RS.19,95,569/- WAS PAID/SPENT AND OUT OF THESE THE BALANCE AMOUNT OF RS.2,63,876/- WAS DULY ADDED IN T HE COMPUTATION OF INCOME FILED ALONG- WITH THE RETURN OF INCOME. IV. THUS THE LD. CIT(A) DID NOT APPRECIATE THAT THIS AM OUNT OF RS.263876/- HAS ALREADY SUFFERED TAX VIEWED FROM ALL THE ANGLES INC LUDING THE DIFFERENCE BETWEEN THE OPENING AND CLOSING BALANCE I.E. RS.2,6 3,876/- ITA NO. 152/ASR/2020 3 (RS.2,44,33,648/- (-) RS.2,41,69,772/-) WAS DULY AD DED BACK IN THE RETURN OF INCOME FILED BY THE ASSESSEE. V. THE LD. CIT(A) DID NOT APPRECIATE THAT THERE WAS NO JUSTIFICATION AND REASON FOR FURTHER ADDITION OF RS.19,52,569/- AND THE SAME IS NOT AT ALL CALLED FOR AND THE SAME MAY BE DELETED. THE LD. CIT(A) FURTHER DID NOT APPRECIATE THAT NO FURTHER ADDITION OF RS.19,52,569/- IS CALLED FOR EITHER U/S 143(1) OR 143(3). IT IS CORRECT THAT APPEAL AGAINST ORDER U/S 143(3) IS PENDING BEFORE THE CIT(A) BUT THE FACT REMAINS THAT NO ADDITION OF RS.19,52,569/- IS CALLED FOR EITHER U/S 143(1) OR U/S 143(3). THE ADDITION M ADE U/S 143(1) SHOULD HAVE BEEN DELETED AND THIS ADDITION HAS BEEN CONFIR MED WITHOUT ANY RHYME & REASON. VI. THAT ANY OTHER GROUND OF APPEAL WHICH MAY BE ARGUED AT THE TIME OF HEARING OF THE APPEAL. 1. AT THE OUTSET THE LD AR HAD DRAWN OUR ATTENTION TO PAGE 6 OF THE ORDER PASSED BY CIT(A) WHEREIN THE CIT(A) HAD DISALLOWED THE CLA IM OF THE ASSESSEE BY OBSERVING AS UNDER. II. FURTHER, DISALLOWANCE OF RS.22,59,445/- HAS BE EN MADE BY CPC OF THE PROVISION FOR PAYMENT OF GRATUITY NOT ALLOWABLE U/S 40A(7). THE DISALLOWANCE HAS BEEN RIGHTLY MADE BY CPC ON THE BA SIS OF 3CD, COL 21(E), I.E., ON THE BASIS OF THE AUDITORS CERTIFICATE. 2. THE LD AR HAD ALSO DRAWN OUR ATTENTION TO PAGE 50 O F THE PAPER BOOK WHEREIN THE CERTIFICATE OF THE CHARTERED ACCOUNTANT WAS PLA CED CERTIFYING THAT THE AMOUNT WAS MADE TOWARDS THE GRATUITY CONTRIBUTION WERE MADE DURING THE YEAR UNDER CONSIDERATION. IT WAS SUBMITTED THAT THE LOWER AUTHORITY HAD WRONGLY DISALLOWED THE PAYMENT MADE BY THE ASSESSEE ON THE PRETEXT THAT THE ITA NO. 152/ASR/2020 4 SAME WAS NOT MADE DURING THE YEAR CONSIDERATION. TH E LD AR HAD SUBMITTED THAT THE MATTER BE KINDLY REMITTED BACK TO THE FOLL OW OF THE ASSESSING OFFICER CONCERNED FOR THE PURPOSE OF VERIFICATION OF THE AB OVE SAID FACT. 3. PER CONTRA, THE LD DR THE ORDER RELIED UPON LOWER A UTHORITIES AND HAS SUBMITTED THAT HE HAS NO OBJECTION IF THE MATTER SE TBACK FOR AO VERIFICATION. 4. WE HAVE HEARD THE RIVAL CONTENTION OF THE PARTY AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT IS THE CASE OF THE ASSESSEE THAT THE ASSESSEE HAD MADE CONTRIBUTION TOWARDS THE GRATUITY FUNDS DURING THE ASSESSMENT YEAR UNDER CONSIDERATION AND THEREFORE T HE ASSESSEE IS ENTITLED TO THE DEDICATION LIABLE UNDER SECTION 40A(7 ) OF THE ACT. 5. IN OUR VIEW, ONCE THE ASSESSEE HAD MADE THE PAYMEN T DURING THE YEAR UNDER CONSIDERATION THEN THE SAME IS REQUIRED TO BE ALLOW ED. HOWEVER, THE ABOVE SAID FACT HAVE NOT BEEN CONSIDERED BY THE LOWER AUT HORITIES AND THEREFORE WE DEEM IT APPROPRIATE TO REMAND BACK THE MATTER TO T HE FILE OF THE CONCERNED AO TO VERIFY WHETHER THE CONTRIBUTION TOWARDS THE GRAT UITY FUNDS WERE PAID BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION OR NOT . IF ON VERIFICATION THE AO COMES TO THE CONCLUSION THAT THE CONTRIBUTION WERE MADE IN THE YEAR UNDER CONSIDERATION THEN THE AO IS DIRECTED TO ALLOW THE BENEFIT OF 40A(7) TO THE ASSESSEE. NEEDLESS TO SAY, THAT WHILE VERIFYING ABO VE SET BACK OF CONTRIBUTION THE AO SHALL AFFORD THE OPPORTUNITY TO THE ASSESSEE AND ALSO PERMIT HIM TO SUPPORT THE CONTENTION ON THE BASIS OF THE DOCUMENT S/ EVIDENCE MAY BE ITA NO. 152/ASR/2020 5 ADVISED. ACCORDINGLY, THE APPEAL OF ASSESSEE IS ALL OWED FOR STATISTICALLY PURPOSES. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14.07.2021 SD/- SD/- (DR. M. L. MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 14.07.2021 GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1)THE APPELLANT (2) THE RESPONDENT (3) THE CIT (4) THE CIT (APPEALS) (5) THE DR, I.T.A.T. TRUE COPY BY ORDER