ACIT Vs Fitrite Packers (ITAT Mumbai)
In the case of ACIT Vs Fitrite Packers, the Income Tax Appellate Tribunal (ITAT) Mumbai dismissed the Revenue’s appeal, affirming the decision of the Commissioner of Income Tax (Appeals) [CIT(A)]. The appeal arose from adjustments made by the Central Processing Centre (CPC) during the processing of Fitrite Packers’ return for the assessment year 2020-21. The CPC disallowed two amounts: a penalty of ₹1,000 and a contingent liability of ₹4,10,88,888. The assessee, a partnership firm engaged in manufacturing packaging materials, appealed successfully to the CIT(A), prompting the Revenue’s appeal to the ITAT.
The ITAT reviewed the records and found no merit in the Revenue’s claims. It noted that the ₹1,000 penalty had already been disallowed by the assessee while filing its return, rendering the CPC’s adjustment redundant. Regarding the contingent liability, the ITAT agreed with the CIT(A)’s finding that the amount was merely disclosed in the financial statements and not claimed as an expense. The ITAT also dismissed the argument that additional evidence was admitted in violation of Rule 46A, observing that all necessary documents were already part of the tax return filed with the department. Consequently, the ITAT dismissed the Revenue’s appeal, upholding the CIT(A)’s factual findings.
