Case Law Details
Shri Subhash Bose Vs. DCIT (ITAT Kolkata)
The main grievance of the assessee was that before making the dis allowance the assessee was never given an opportunity to explain the discrepancy which was made in the auditor’s report. According to the ld. Counsel, sec. 43B of the Act is attracted only when the amount in question are debited to the P&L Account for the relevant assessment year but not paid within the specified date. According to him, in this case the fact is that the concerned liability of Rs. 1,78,334/- was not out of the current year’s VAT expenses of Rs. 9,83,648/- but brought forward from the earlier year. For substantiating this contention, the Ld. AR drew our attention to ledger account available at page 76 of the paper book which is the VAT outstanding account wherein we observe as on 01.04.2009, the opening balance is shown as Rs. 1,79,337.50 and the closing balance is also shown as Rs. 1,78,334.50 an amount of Rs. 1,003/- was paid as per challan on 24.09.2009. Therefore, according to Ld. AR, the tax auditor claimed that the impugned unpaid VAT amounting to Rs.1,78,334/- was incurred in the previous year of 2009-10 was, therefore, not true at all but a mistake happened to the auditor and the assessee cannot be victimized for the error committed by the auditor. The Ld. AR submitted that in the year under consideration, a total VAT expenditure debited to the P&L Account was Rs. 9,83,648/- which is evident from page 77 of the paper book, which is the VAT ledger account for the period from 01.04.2009 to 31.03.2010 which shows that entire amount has been debited by various parties and therefore, there was no unpaid liability on this account. The Ld. AR brought to our notice that the entire dis allowance represents the VAT outstanding for the FY 2007-08 and 2006- 07 of Rs. 18,027/- and Rs. 1,60,307 respectively and in this matter the tax auditor duly reported concerned liabilities in their tax audit report i.e. C-21B(b) of F/No.3CD which was placed at pages 84, 85 and 100 of paper book. From page 85 it reveals that VAT not paid was to the tune of Rs. 18,027/- (For 3CD of AY 2008-09 starting from page 80) and from page 100 shows Rs. 1,60,307.50 not paid (which is Form No. 3CD for AY 2007-08 (starting from page 96 of paper book on-wards). Therefore, according to the Ld. AR, the impugned sum were also added back in the computation of income for those assessment years and the Ld. AR drew our attention to ITR Acknowledgement and computation pages 78, 79, 90 and 91 of the paper book from where we find the facts to be correct. Therefore, in the aforesaid facts and circumstances, the dis allowance on account of VAT not pad of Rs.1,78,334/- was made by the AO only because of erroneous auditor’s report and it has been brought to our notice how the error has occurred and we find that assessee’s contentions are backed by records, therefore, we being the final fact finding authority, find that it was the mistake of the auditor who has wrongly given the figures and made wrong observation because of which the AO made the dis allowance. However, the AO before making the dis allowance could have asked the assessee to explain before making the dis allowance. The Ld. CIT(A) has also erred in not appreciating the contention of the assessee in right perspective, therefore, we are inclined to delete the addition made by the AO and confirmed by the Ld. CIT(A).
Full Text of the ITAT Order is as follows:-
This is an appeal filed by the assessee against the order of Ld. CIT(A)-15, Kolkata dated 06.02.2015 for AY 2010-11.
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