Kastwel Foundries Vs DCIT (ITAT Ahmedabad)
In a recent ruling, the Income Tax Appellate Tribunal (ITAT), Ahmedabad bench, granted partial relief to M/s Kastwel Foundries in a dispute with the Deputy Commissioner of Income Tax (DCIT) concerning the Assessment Year 2012-13. The tribunal’s order addressed various additions and disallowances made by the tax authorities, modifying some of the initial adjustments.
Kastwel Foundries, a firm involved in the manufacturing of Ferro Alloys and Master Alloys, had filed its return of income for the assessment year in question, declaring a total income of ₹70,20,916. The firm had reported a gross profit of 15.60% on its turnover for the relevant financial year, an increase compared to the previous year’s 13.62%.
The case was selected for scrutiny under the Computer Assisted Scrutiny Selection (CASS) system. Following the issuance of notices, the Assessing Officer (AO) conducted an examination of the firm’s accounts and made several additions and disallowances, which increased the total taxable income. These adjustments included amounts related to late payment of employee’s contribution to ESIC, interest on income tax refund, disallowance of depreciation, disallowance of interest paid on TDS, capitalization of interest expenses, disallowance of commission expenses, and an addition under Section 68 of the Income Tax Act, 1961.
