Case Law Details
Vipul Medcorp Insurance Vs ACIT (ITAT Delhi)
Mismatch in Audit & ITR Columns – Tribunal Restores 43B Addition to AO- ITAT Delhi Restores CPC Additions on Gratuity & 43B Disallowance for Fresh Verification
Background
- Assessee filed ROI (24.10.2018) declaring ₹4.96 Cr.
- Processed u/s 143(1) by CPC on 02.11.2019 → income enhanced to ₹6.48 Cr. by adding ₹1.52 Cr.:
Gratuity disallowance u/s 40A(7): ₹16.53 lakh.
Mismatch in 43B disallowance: ₹22.32 lakh.
Employee contributions u/s 36(1)(va): ₹1.13 Cr.
- CIT(A) confirmed all additions.
Assessee’s Arguments
- Gratuity disallowance of ₹16.53 lakh already disallowed in ROI; CPC made double disallowance based on mismatch in Tax Audit vs ITR columns.
- For ₹22.32 lakh (bonus + gratuity payments), assessee claimed payments were duly made and correctly reported in ITR, though CPC picked mismatch from audit report.
- Filed ledger, balance sheet & ITR extracts before ITAT to support claim.
Tribunal’s Observations/ Decision
- CPC while processing return mechanically disallowed amounts without reconciling audit & ITR reporting.
- Assessee furnished documentary evidence to show disallowances were already made in ROI.
- In such cases, matter requires fresh verification by AO.
- Issues on ₹16.53 lakh gratuity & ₹22.32 lakh 43B mismatch remanded back to AO for de novo adjudication.
- AO directed to grant opportunity of hearing & consider evidences afresh.
- Ground on s.36(1)(va) disallowance not pressed → dismissed.
- Appeal partly allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT DELHI
The instant appeal filed by the assessee is directed against the order passed by the Ld. NFAC, Delhi dated 23.06.2023 arising out of intimation order dated 02.11.2019 passed by the CPC Bangalore, under Section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for Assessment Year 2018-19.
2. The assessee filed its return of income on 24.10.2018 declaring total income at Rs.4,96,39,170/- which was processed under Section 143(1) of the Act and intimation dated 02.11.2019 was served upon the assessee. In fact, by and under the said intimation order dated 02.11.2019 the income of the appellant has been enhanced to Rs.6,48,67,830/- upon making addition of Rs.1,52,28,657/- in the following manner:
| Sr. No. |
Particular | Amount (in Rs.) | |
| Income as per Income Tax Return | 4,96,39,170/- | ||
| Add: | Additions: | ||
| 1. | Inconsistency in Provision for payment of gratuity [40A(7)] | 16,53,594/- | |
| 2. | Inconsistency in amount disallowed under Section 43B in any preceding previous year but allowable during the previous year | 22,32,005/- | |
| 3. | Contribution to any provident fund or superannuation fund or any fund set up under ESI Act or any other fund to the extent not credited to the employees account on or before due date [36(1)(va)] | 1,13,43,058/- | |
| Total additions | 1,52,28,657/- | ||
| Total Income as per Order u/s 143(1) | 6,48,67,830/- |
3. The above addition was further confirmed by the First Appellate Authority. Hence, the instant appeal before us.
4. Heard the parties and perused the records. In fact, the addition on account of payment of gratuity amounting to Rs.16,53,594/- was made as per the tax audit report but it is the case of the assessee that the assessee itself disallowed the same in the ITR which is included in the disallowance of total amount of Rs.32,97,862/- made under Section 43B of the Act. The CPC while processing return identified the said amount of addition of Rs.16,53,594/- in the tax audit report and the income tax return and addition was made on the same amount. As the assessee has already made disallowance of Rs.16,53,594/-. Further disallowance made by CPC as above is not sustainable as the case made out by the assessee is supported by the following details:
| Particulars | Amount | Tax Audit Report Filed | ITR Filed | Correct Position |
| Provision for Gratuity for AY 2018-19 | 32,97,862/- | Not required | Column 11(b) of Other Information (P.B. 41) | No reporting required |
| Paid during the year | 16,44,268/- | Clause 26(i)(B)(a) [P.B. 182] | Column 10(b) of Other Information (P.B. 40) | No reporting required |
| Disallowed during the year | 16,53,594/- | Clause 21(e) [P.B. 181] |
To be reported in Column 9(c) of Other information |
5. In support of the above contention made by the assessee the ledger account of provision of gratuity, the balance sheet, profit and loss account and ITR for Assessment Year 2018-19 has been filed before us. Under this facts and circumstances of the matter, we, therefore, find it fit and proper to remit the issue to the Ld. AO for deciding the same afresh as indicated hereinabove. This issue is, thus, allowed for statistical purpose. The Ld. AO is further directed to grant an opportunity of being heard to the assessee and to consider the evidence on record or any other evidence which the assessee may choose to file at the time of hearing of the matter.
2nd Ground:
6. Disallowance of Rs.22,32,005/- under Section 43B of the Act alleging inconsistency in the amount disallowed under Section 43B of the Act in preceding previous year. Such disallowance was made due to mismatch between ITR and tax audit report.
7. It is the case of the assessee that the assessee have paid liability of the same amount of Rs.22,32,005/- pertains to preceding previous year which has been reported in “Column 10th of Part A: OI-Other Information” of ITR. The details of the same are reproduced as under:
| Sr. No. | Particulars | Amount (in Rs.) |
| 10b | Any sum payable by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees | 16,44,268/- |
| 10c | Any sum payable to an employee as bonus or commission for services rendered | 5,87,737/- |
| Total | 22,32,005/- |
For the sake of convenience, the appellant company again provided relevant details in tabular form below for your kind reference:
| Particulars | Amount | Tax Audit Report Filed | ITR Filed | Correct Position |
| Bonus Payment during the year | 5,87,737/- | Clause 26(i)(B)(a) [P.B. 182] | Column 10(c) of other information (P.B. 41) | No reporting required in ITR Form |
| Gratuity Payment during the year | 16,44,268/- | Clause 26(i)(B)(a) [P.B. 182] | Column 10(b) of other Information (P.B.40) |
In view of the above, the said disallowance is unjustified and unwarranted. It is requested before your honour to kindly consider the facts and circumstances of the case and delete the impugned addition.
8. In support of the same the assessee has furnished the following details before us:
| Particulars | Amount | Tax Audit Report Filed | ITR Filed | Correct Position |
| Bonus Payment during the year | 5,87,737/- | Clause 26(i)(B)(a) [P.B. 182] | Column 10(c) of other information (P.B. 41) | No reporting required in ITR Form |
| Gratuity Payment during the year | 16,44,268/- | Clause 26(i)(B)(a) [P.B. 182] | Column 10(b) of other Information (P.B.40) |
9. Under this facts and circumstances of the matter this issue is disposed of by remitting the same to the file of the Ld. AO to consider the same afresh upon granting an opportunity of being heard to the assessee and upon considering the evidences on record or any other evidence which the assessee may chose to file at the time of hearing of the matter.
10. 3rd Ground is not pressed. Hence, this ground is dismissed.
11. The appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 08.07.2025
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