TUMLARE SOFTWARE SERVICES PRIVATE LIMITED,DELHI V. ACIT DCIT CIRCLE 25(1), DELHI

ITA 2653/DEL/2023

AI Insights

The case involves Tumlare Software Services Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals), NFAC, New Delhi, concerning the additions and disallowances made by the Assessing Officer for the Assessment Year 2018-19. The main issues included the computation of income, disallowances related to gratuity surplus, late deposit of Employees Provident Fund, non-deduction of TDS, and various other expenditures. The Tribunal examined the grounds of appeal, the submissions of both parties, and the material on record, ultimately deciding to dismiss the appeal and uphold the CIT(A)'s order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787415 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2018-2019
• Appeal Filed On: 20-09-2023
• Other Referred Cases: Checkmate Services Private Limited (448 ITR 518)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Assessee Lawyers: MANISH JAIN
• Keywords: Depreciation; Capital expenditure; Principle of natural justice; TDS
• Section: 143(3); 37; 40(a)(ia)

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’: NEW DELHI BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No.2653/Del/2023, A.Y. 2018-19 Tumlare Software Services Pvt. Ltd. 9th NDM-1 NSP Pitampura, New Delhi PAN: AAACT6978M Vs. Assistant Commissioner of Income Tax, Circle-25(1), C. R. Building, I P Estate, New Delhi (Appellant) (Respondent) Appellant by Sh. Manish Jain, CA Respondent by Sh. Dheeraj Kumar Jain, Sr. DR Date of Hearing 21/08/2025 Date of Pronouncement 17/11/2025 ORDER PER AVDHESH KUMAR MISHRA, AM This appeal for Assessment Year (‘AY’) 2018-19 filed by the assessee is directed against the order dated 21.07.2023 of the Commissioner of Income Tax (Appeals), NFAC, New Delhi [‘CIT(A)’]. 2. Vide 12 grounds of appeal, the assessee has challenged various additions and disallowances made by the Ld. Assessing Officer (‘AO’) in assessment order dated 07.04.2021. The Ld. AO has computed the income after making following additions and disallowances: Sr. No. Para no. of AO’s order Issue as discussed in AO order Printed from counselvise.com ITA No. 2653 /Del/2023 Tumlare Software Services P. Ltd. 2 1. 3 Schedule BP of return of Income an amount of Rs. 59,35,721/-. Actual payment made Rs. 51,60,265/-. Surplus claim of gratuity to the tune of Rs. 7,75,456 deserves to be added back. 2. 4 Company failed to deposit the Employees Provident Fund within stipulated time 3. 5 Loss on disposal of Fixed assets- Capital Expenditure and cannot be allowed to be debited from the P&L a/c. 4. 6 Cumulative total of cash payments made. The payment so made shall be deemed to be the Profits and Gains of business 5. 7 Assessee co. Made a provision of Rs. 11,25,618 on account of Leave Encashment Provision. Rs. 6,69,886 was paid being leave Encashment. Difference Rs. 4,55,732 disallowed 6. 8 Paid damages to EPFO Rs. 35,203/- and penalty on delay in filing of statutory tax audit report of Rs. 1,50,000/- 7. 9 Loss on misappropriation of Funds 8. 10 Difference between Depreciation claimed under Companies Act and Income Tax Act, 9. 11 Disallowance of Reimbursement u/s 40A(a)(ia) 10. 12 No specific explanation of Donation made 11. 13 Disallowance on account of payment of interest paid u/s 234 for default in payment of advance income-tax 12. 14 Other Expenses claimed – Repairs and maintenance cost are almost equal to the value of Fixed Assets 13. 15 Repair charges of building- No such building or immovable property is found or given in Schedule of Printed from counselvise.com ITA No. 2653 /Del/2023 Tumlare Software Services P. Ltd. 3 Fixed Assets 14. 16 Other Expenses being debited on account of payment to auditors 15. 17 Difference in Sale of Services ascertained from the audited profit and loss account reported (Rs. 13,42,41,894-Rs. 11,78,26,561) 16. 18 Payment made u/s 195 of the IT Act without TDS 17. 19 Defaulted amount of Rs. 1830667 (being 30% of entire payment of Rs. 6108223 paid without TDS) within the meaning of provisions of Section 40(a)(ia) 18. 20 Interest paid against liability of payment of TCS 19. 21 Inadmissible expenditure or Disallowable expenditure in light of provisions of Section 37 of the IT Act 20. 22 Inadmissible expenditure of the assessee company on account of Excessive Remuneration paid to the specified person as defined in section 40(A)(2)(b) 3. At the outset, the Ld. Authorized Representative (‘AR’) of the assessee submitted that the assessee had got substantial relief by the Ld. CIT(A), though it had raised grounds relating to almost all additions and disallowances made by the Ld. AO [which also included the addition/ disallowance deleted by the Ld. CIT(A)]. On bench directions, the Ld. Senior Departmental Representative (‘Sr. DR’) submitted a copy of the order giving appeal effect to the order of Ld. CIT(A)’s, wherein we find that the disallowance of Rs.7,75,456/- made under section 40A(7) of the Income Tax Act, 1961 (‘Act’), disallowance of Rs.18,59,443/- made under section 36(1)(va) of the Act, disallowance of interest of Rs.16,58,380/- paid due to Tax Printed from counselvise.com ITA No. 2653 /Del/2023 Tumlare Software Services P. Ltd. 4 Collection at Source (TCS) default and the disallowance of Rs.48,03,040/- sustained by the Ld. CIT(A) out of the disallowance of Rs.74,48,680/- made out of various expenditure require adjudication at our end. Further, the income determined under section 143(1) of the Act is also in challenge as it has a direct impact on assessed income under section 143(3) of the Act. Thus, six effective grounds out of 12 grounds of appeal (ground no. 4, 5, 6, 8, 9 and 10) require adjudication at our end, which read as under: - “4. That the Ld. Assessing Officer has erred on facts and in law and grossly neglect the principle of natural justice by taking the income as determined u/s 143(1)(a) of the Act, of Rs.2,15,06,362/- as returned income as against the income of Rs.1,54,07,865/- as submitted by the assessee during assessment proceedings. 5. That the Ld. Assessing Officer has erred on facts and in law by disallowing of Rs.7,75,456/- in accordance with the provisions of section 40A(7) of the Income Tax Act, 1961 on account of surplus claim of gratuity, without tangible evidence and understanding of the real facts in the matter as the same has already been considered in the computation of income filed to the Ld. AO during assessment proceedings. 6. That the Ld. Assessing Officer erred on facts and in law while making a disallowance of Rs.18,59,443/- on account of alleged late deposit of PF (employees’ contribution), deposited prior to filing of income tax return. 8. That the Ld. Assessing Officer has erred on facts and in law by making an addition of Rs.85,937/- on account of non-deduction of TDS u/s 195 of the Act whereas the same has already been added to the total income in the computation of income submitted to the Ld. AO. 9. That the Ld. Assessing Officer has erred on facts and in law by making an addition of Rs.16,58,380/- on account of interest paid against the liability of non-deduction of TDS/TCS as per the provisions of Income Tax Act, 1961 whereas the same has already been added to the total income in the computation of income submitted to the Ld. AO. Printed from counselvise.com ITA No. 2653 /Del/2023 Tumlare Software Services P. Ltd. 5 10. That the Ld. Assessing Officer has erred on facts and in law by making an addition of Rs.74,48,680/- on account of inadmissible expenditure or disallowable expenditure whereas the same has already been added to the total income in the computation of income submitted to the Ld. AO and also by the Ld. A.O individually in its impugned order.” 4. Before us, the Ld. AR contended that the AO would have computed income after taking the returned income at Rs.1,54,07,865/- instead of income determined at Rs.2,15,06,362/- under section 143(1) of the Act. He therefore, prayed relief on this score i.e. difference of Rs.60,98,497/- (Rs. 2,15,06,362 - Rs.1,54,07,865/-). Further, he contended that the disallowance of Rs.7,75,456/- under section 40A(7) of the Act has already been made in the revised computation; hence, the same should have not been added back again. On our specific query that the disallowance of PF of Rs.18,59,443/- under section 36(1)(va) of the Act, in view of the decision of the Hon’ble Supreme Court in the case of Checkmate Services Private Limited (448 ITR 518); prima- facie, appeared justified, the Ld. AR did not have a plausible reply. However, he submitted that the Ld. CIT(A) had restored this matter to the Ld. AO for verification, therefore, it would be better that this issue should be decided accordingly. 5. With respect to the disallowance of Rs.85,937/- made under section 195 of the Act and the disallowance of interest of Rs.16,58,380/- due to TCS default, the Ld. AR submitted that the assessee had already made suo-moto disallowances in revised computation of income filed during the course of assessment proceedings. Therefore, the Ld. CIT(A) should have not sustained Printed from counselvise.com ITA No. 2653 /Del/2023 Tumlare Software Services P. Ltd. 6 these disallowances. On the issue of disallowance of Rs.48,03,040/- on account of inadmissible expenditure is concerned, the Ld. AR submitted that assessee had made suo-moto disallowance in the revised computation of income filed during the course of assessment proceedings; therefore, the Ld. CIT(A) was not justified to sustain the same disallowance. 6. On the other hand, the Ld. Sr. DR defended the impugned order and submitted that the Ld. CIT(A) had verified the disallowance from the computation of income under section 143(1) of the Act and granted the consequential relief. Only the admitted disallowance not being part of the computation of income under section 143(1) of the Act had been sustained by the Ld. CIT(A). Since the Ld. AO had not taken cognizance of the suo-moto disallowance made in the revised computation of income filed during the course of assessment proceedings; therefore, further relief as prayed by the Ld. AR was not called for. 7. We have heard both the parties and have perused the material available on the record. We do not find any infirmity in the order of the Ld. CIT(A) as it is well reasoned. The Ld. AR has not brought any material on the record to contradict the finding of the Ld. CIT(A). Hence, we are not inclined to interfere with the order of the Ld. CIT(A) on the above-mentioned disputed issues other than the matters remanded back to the Ld. AO for verifications by the Ld. CIT(A) on the reasoning that the Ld. CIT(A) has carried out due verification before deciding the appeal by the Ld. CIT(A) and the appellant assessee has Printed from counselvise.com ITA No. 2653 /Del/2023 Tumlare Software Services P. Ltd. 7 not demonstrated that such verification is prima-facie wrong. The issues remanded back to the Ld. AO for verifications are also held justified. We therefore, dismiss the appeal of the assessee. 8. In the result, the appeal of the assessee stand dismissed as above. Order pronounced in open Court on 17th November, 2025 Sd/- Sd/- (YOGESH KUMAR U.S.) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 17/11/2025 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT/PCIT 4. CIT(Appeals) 5. Sr. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "