Ranar Agrochem Limited Vs DCIT (ITAT Visakhapatnam)
ITAT Visakhapatnam held that addition towards unexplained cash credits under section 68 of the Income Tax Act upheld since assessee company failed to substantiate identity and creditworthiness of lender.
Facts- AO vide his order passed u/s. 143(3) of the Act, dated 30/12/2016, made certain additions/disallowances to the returned income of the assessee company, viz. (i) disallowance u/s. 36(1)(va) of the assessee’s claim for deduction of the delayed deposit of the employees share of contribution towards PF and ESI: Rs. 2,32,202/-; (ii) disallowance u/s. 40(a)(ia) of the assessee’s claim for deduction of provision towards tax audit expenses: Rs. 40,000/-; (iii) addition of the unreconciled interest income as reflected in Form No. 26AS vis-à-vis books of account of Rs. 1,35,680/-; and (iv) addition of the unsecured loans as unexplained cash credits u/s. 68 of the Act: Rs. 3,47,97,000/-.
CIT(A) directed the AO to consider the assessee’s claim that the unreconciled receipt of Rs. 1,35,680/- was accounted for in the next financial year, but upheld the remaining additions/disallowances that were made by him. Being aggrieved, the present appeal is filed.
Conclusion- Apropos, the disallowance of the delayed deposit of the employees’ share of contribution towards ESI/PF made by the AO under section 36(1)(va) r.w.s 2(24)(x) of the Act, we find that as the issue as on date is no more res integra pursuant to the judgment of the Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd Vs. Commissioner of Income Tax-I, Civil Appeal No. 2833 of 2016, dated 12/10/2022, therefore, no infirmity emerges from the orders of the authorities below who have rightly made/sustained the said addition.
