Syntel Private Limited Vs ACIT (ITAT Mumbai)
ITAT Mumbai Remands ₹33.83 Cr Disallowance: Schedule BP Claim Needs Fresh Verification; MAT Addition Also Set Aside
In Syntel Private Limited vs. ACIT, Circle 11(2)(2), Mumbai (ITA No.6863/Mum/2025, AY 2018-19), the Mumbai ITAT “G” Bench partly allowed the Assessee’s appeal by setting aside the disallowance of ₹33.83 crore made u/s 37 and the corresponding addition to book profits u/s 115JB, and remanded the matter to the AO for de novo adjudication.
The Assessee had claimed ₹33.83 crore under Schedule BP – “Any other amount allowable as deduction”, comprising mainly employee bonus/awards paid before the due date u/s 43B and profit on sale of assets. The AO disallowed the entire amount u/s 37 on the ground that no explanation or supporting details were furnished and also mechanically increased book profits u/s 115JB by the same figure. The NFAC upheld the additions, noting lack of rebuttal.
Before the Tribunal, the Assessee demonstrated that the impugned amount was both added back and deducted in the return, resulting in nil net impact on business income, and that relevant disclosures were available in Schedule BP, Schedule OI and the tax audit report. The Tribunal found prima facie merit in this contention but accepted the Revenue’s plea that the breakup required verification. Accordingly, the ITAT set aside the disallowance u/s 37 for fresh examination with a direction to grant due opportunity to the Assessee. Consequentially, the MAT adjustment u/s 115JB was also set aside, reiterating that disallowances under normal provisions cannot be automatically imported into MAT unless they fall within Explanation 1 to s.115JB(2).
Grounds challenging jurisdictional defects under the faceless scheme were treated as academic, interest u/s 234C was held consequential, and the appeal was partly allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
