Arora & Associates Reality Limited, New Delhi V. DCIT CPC, Bangalore

ITA 1706/DEL/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3067 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Appeal Filed On: 15-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV MAHAJAN
• Section: 43; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-1, NEW DELHI BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO.1706/DEL/2020 ASSESSMENT YEAR: 2019-20 ARORA & ASSOCIATES REALITY LIMITED, 131, GF, WORLD TRADE CENTRE, BABAR ROAD, NEW DELHI-110001 PAN NO. AAACK0330L VS DCIT CPC BANGALORE (APPELLANT) (RESPONDENT) APPELLANT BY SH. SANJAY JAIN, CA RESPONDENT BY SH. SANJEEV MAHAJAN, SR. DR DATE OF HEARING: 21/10/2021 DATE OF PRONOUNCEMENT: 25/10/2021 ORDER PER N. K. BILLAIYA, AM: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE CIT(A)-1, NEW DELHI DATED 31.08.2020 PERTAINING TO A.Y.2019-20. 2. THE GRIEVANCE OF THE ASSESSEE READ AS UNDER :- 2 3 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT WH ILE PROCESSING THE RETURN OF INCOME FILED BY THE ASSESSEE, CPC BAN GALORE IN INTIMATION U/S. 143 (1) OF THE ACT DISALLOWED RS.7, 23,552/-ON ACCOUNT OF SUBSCRIPTION FEES PAID TO CLUB. 4. THE ASSESSEE AGITATED BEFORE THE CIT(A) BUT THE CIT(A) DISMISSED THE APPEAL BY HOLDING AS UNDER : DECISION: 5.1 THE FACTS OF THE CASE IS THAT THE CPC BANGALORE VID E ORDER DATED 20.05.2020 HAS MADE ADJUSTMENT U/S 143(1 )(A) ON ACCOUNT OF INCONSISTENCY IN TOTAL AMOUNT OF DISALLOW ANCE UNDER SECTION 37OF THE ACT RELYING UPON THE INFORMATION G IVEN BY THE AUDITOR IN FORM 3CD. IN THE PRESENT APPEAL, THE APP ELLANT HAS CHALLENGED THIS RELYING UPON VARIOUS JUDGMENTS/ DECIS IONS MENTIONED IN APPELLANTS SUBMISSION SUPRA IN PARA 4. 5.2 THE CASE OF THE APPELLANT HAS BEEN CAREFULLY CONSIDE RED. FROM THE ORDER OF CPC IT IS APPARENT THAT FOLLOWING REASON HAS BEEN GIVEN BY CPC FOR MAKING SUCH ADJUSTMENT- 5.3 AS PER THE PROVISIONS OF SECTION 143(1)(A)(IV) THE FOLLOWING ADJUSTMENT CAN BE MADE WHICH IS REPRODUCED AS UNDER: 143. 2[(1) WHERE A RETURN HAS BEEN MADE UNDER SECTION 139, IV DISALLOWANCE OF EXPENDITURE INDICATED IN THE AUDIT REPORT BUT NOT TAKEN INTO ACCOUNT IN C OMPUTING THE TOTAL INCOME IN THE RETURN 143(1)(A)(I V) S. NO. PARTICULARS AMOUNT IN INCOME TAX RETURN AMOUNT MENTIONED IN FORM ANNEXURE 3CD VARIANCE 1. INCONSISTENCY IN TOTAL AMOUNT OF DISALLOWANCE UNDER SECTION 37 20000 723552 723552 4 OR IN RESPONSE TO A NOTICE UNDER SUB-SECTION (1) OF SECTION 142, SUCH RETURN SHALL BE PROCESSED IN THE FOLLOWING MAN NER, NAMELY: (A) THE TOTAL INCOME OR LOSS SHALL BE COMPUTED AFTER MAKING THE FOLLOWING ADJUSTMENTS, NAMELY: (IV) DISALLOWANCE OF EXPENDITURE INDICATED IN THE AU DIT REPORT BUT NOT TAKEN INTO ACCOUNT IN COMPUTING THE TOTAL INCOME IN THE RETURN; THIS SHOWS THAT CPC IS WITHIN THE POWER TO MAKE SUC H ADJUSTMENT AS APPELLANTS AUDITOR HIMSELF DISALLOWED IT BUT APPELLANT HAS CLAIMED IT IN THE RETURN OF INCOME AGA INST THE AUDIT REPORT. 5.4 IN THIS LIGHT, CPC IS JUSTIFIED IN MAKING THE AD DITION UNDER SECTION 37. THIS FACT HAS ALSO BEEN REPORTED BY THE AUDITOR WHO HAS AUDITED THE ACCOUNTS OF THE APPELLANT IN FOR M 3CD. ON THE BASIS OF THE ABOVE, THE ADDITION MADE BY CPC UNDER THIS HEAD OF RS.7,03,552/- IS CONFIRMED AND GROUND OF APPEAL NO.1 TO 4 ARE DISMISSED. 5. BEFORE ME THE COUNSEL FOR THE ASSESSEE DREW MY A TTENTION TO THE TAX AUDIT REPORT AND POINTED OUT THAT THE AUDIT ORS HAVE NOT MADE ANY ADVERSE COMMENT. 6. IT IS THE SAY OF THE COUNSEL THAT CPC, BANGALORE MADE ADDITION WHICH ARE NOT PERMISSIBLE IN PROCESSING TH E RETURN U/S. 143 (1) OF THE ACT. 5 7. PER CONTRA THE DR STRONGLY SUPPORTED THE FINDING S OF THE AO/ CIT(A). 8. I HAVE CAREFULLY CONSIDERED THE INTIMATION U/S.1 43 (1) OF THE ACT BY CPC, BANGALORE VIZ-A-VIZ THE ORDER OF THE CI T(A). FOLLOWING INFORMATION WAS PROVIDED IN THE TAX AUDIT REPORT :- 9. THE REASONS GIVEN BY CPC FOR MAKING THE ADJUSTME NT IS DISALLOWANCE OF EXPENDITURE INDICATED IN THE AUDIT REPORT BUT NOT TAKEN INTO ACCOUNT IN COMPUTING THE TOTAL INCOME IN THE RETURN U/S. 143 (1)(A)(IV). 10. A CAREFUL PERUSAL OF THE RELEVANT PART OF THE A UDIT REPORT SHOW THAT NOWHERE THE AUDITORS HAVE REPORTED THE DI SALLOWANCE OF 6 EXPENDITURE AND, THEREFORE, INVOKING PROVISIONS OF SECTION 143 (1)(A)(IV) IS UNWARRANTED. 11. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE RELEVANT AUDIT REPORT MENTIONED HERE IN ABOVE I DIRECT THE A O DELETE THE IMPUGNED ADDITION. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25.10.2021. SD/- (N. K. BILLAIYA) ACCOUNTANT MEMBER *NEHA* DATE:- 25.10.2021 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGI STRAR ITAT NEW DELHI 7 DATE OF DICTATION 2 1 .10.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 25.10.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 25.10.2021 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS 25.10.2021 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 25.10.2021 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 25.10.2021 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 25.10.2021 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25.10.2021 DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER