AVG Logistics Limited Vs ADIT (ITAT Delhi)
Audit Report Disclosure ≠ Taxable Income: ITAT Delhi Sends 143(1) Additions Back for Fresh Verification
Delhi ITAT held that mere disclosures in Tax Audit Report (Form 3CD) cannot automatically result in additions while processing return u/s 143(1). The Tribunal noted that the CPC had added ₹1.37 crore towards contingent liabilities solely based on Clause 21(g) of the tax audit report, despite the fact that such liabilities were not debited to the P&L account and were disclosed only in the notes to accounts as required by AS-29.
The ITAT further observed that leave encashment and labour welfare fund payments, though reported in the tax audit report, were actually paid before filing of return, making them allowable u/s 43B. Since the detailed factual explanation of the assessee was not examined either by CPC or by JCIT(A), the Tribunal restored the matter to the AO for de novo adjudication, directing a speaking order after proper verification. Accordingly, the appeal was allowed for statistical purposes
FULL TEXT OF THE ORDER OF ITAT DELHI
1. The appeal in ITA No.242/Del/2025 for AY 2020-21, arises out of the order of the Jt. Commissioner of Income Tax (Appeals)-2, Mumbai [hereinafter referred to as „ JCIT(A)’, in short] in Appeal No. ITBA/APL/S/250/2024-25/1070115401(1) dated 05.11.2024 against the order of assessment passed u/s 143(1) of the Income-tax Act, 1961 (hereinafter referred to as „the Act’) dated 30.11.2024 by the Assessing Officer, CPC, Bengaluru (hereinafter referred to as „ld. AO’).
