MAHINDRA RURAL HOUSING FINANCE LIMITED , MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 7(1)(1), MUMBAI

ITA 3165/MUM/2022

AI Insights

Mahindra Rural Housing Finance Ltd. filed an appeal against the order of the Commissioner of Income Tax (Appeals), which had been passed under section 250 of the Income Tax Act, 1961. The appeal challenged the disallowance of a provision for contingencies amounting to Rs. 25,00,000, which the assessee claimed was related to staff welfare, conveyance, and traveling of employees from the previous assessment year. The Assessing Officer had disallowed this provision, stating that only ascertained expenses are allowable as deductions and not provisions. The CIT(A) did not address this specific issue in the appeal, leading to the Tribunal's decision to remand the case back for a thorough examination of this ground.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125822 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 06-02-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 13-12-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Section: 143(3); 142(1); 250; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI G.S. PANNU, PRESIDENT AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA no.3165/Mum./2022 (Assessment Year : 2012–13) Mahindra Rural Housing Finance Ltd. 2 nd Floor, Sadhna Floor, 570, P.B. Marg Behind Mahindra Towers Worli Mumbai 400 018 PAN – AAFCM1099K ................ Appellant v/s Dy. Commissioner of Income Tax Circle–7(1)(1), Mumbai ................Respondent Assessee by : Shri Viral Shah Revenue by : Shri P.D. Chogule Date of Hearing – 07/02/2023 Date of Order – 23/02/2023 O R D E R PER BENCH The captioned appeal has been filed by the assessee challenging the impugned order dated 17/10/2022, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2012–13. 2. In this appeal, the assessee has raised the following grounds:– “1. On the facts and the circumstances of the case and in law, the CIT(A) erred in passing an order in reference to issues which were not the point of consideration in the case of the Appellant. Mahindra Rural Housing Finance Ltd. ITA no.3165/Mum./2022 Page | 2 2. On the facts and the circumstances of the case and in law, the CIT(A) erred in not adjudicating the grounds of appeal taken by the Appellant towards unwarranted disallowance of provision for contingencies of Rs. 25,00,000 3. We have considered the submissions of both sides and perused the material available on record. The brief facts of the case are that the assessee filed its return of income on 27/09/2012 declaring total income at Rs.15,03,46,460. The return of income filed by the assessee was selected for scrutiny and statutory notices under section 143(2) and section 142(1) along with a questionnaire were issued and served on the assessee. During the assessment proceedings, it was observed that the assessee in the computation of income claimed a deduction of provision for contingency of Rs.25 lakhs, which was disallowed in the assessment year 2011-12. In its justification for the aforesaid claim, the assessee submitted that the provision for contingency was towards staff welfare, conveyance, and travelling of employees. The assessee further submitted that this provision has been added in the computation of income in the assessment year 2011-12 and therefore same was claimed in the year under consideration. The Assessing Officer vide order dated 17/03/2015 passed under section 143(3) of the Act did not agree with the submissions of the assessee and held that only ascertained expenses are allowable as deduction and not the provision. The AO further held that the assessee did not furnish the details of corresponding expenses and accordingly disallowed the provision for contingency expenses of Rs.25 lakhs claim by the assessee. 4. In its appeal before the learned CIT(A), the assessee raised the following ground:- Mahindra Rural Housing Finance Ltd. ITA no.3165/Mum./2022 Page | 3 “1. The learned DCIT enved in making disallowance of Rs. 25,00,000 under the head Provision for Contingency expenses on adhoc basis. The appellant has to submit that the said provision was not made during the year under consideration but pertained to earlier Assessment Year. Accordingly no disallowance ought to be made during the year under consideration.” 5. The learned CIT(A) vide impugned order observed as under:- “5.1 I have carefully considered the facts and circumstances of the case and the submission of the appellant. The appellant has contended that although it had deposited ESI/PF within the due date of payment, the auditor had inadvertently entered the actual date of payment of as 12/02/2019 in place of "12/02/2020" in their 3CD report. 5.2 I find this is a factual issue verifiable from the record. Therefore, the AO is directed to verify the actual dates of payment and allow the claim of the appellant as per law, if found in order. 6. In the result, appeal is allowed for statistical purposes.” 6. Thus, from the above, it is evident that the learned CIT(A) instead of deciding the issue raised in the ground of appeal filed by the assessee proceeded to adjudicate the assessee’s appeal on some other issue, which does not arise from the facts of the present case. Accordingly, in view of the above, we deem it appropriate to restore the appeal to the file of the learned CIT(A) for de novo adjudication of ground raised by the assessee after hearing both parties. As a result, grounds raised by the assessee are allowed for statistical purposes. 7. In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 23/02/2023 Sd/- G.S. PANNU PRESIDENT Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 23/02/2023 Mahindra Rural Housing Finance Ltd. ITA no.3165/Mum./2022 Page | 4 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Mumbai City concerned; (5) The DR, ITAT, Mumbai; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Assistant Registrar ITAT, Mumbai