9911796707
TMI Blog2022 (1) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... In our view, this is not justified. Accordingly, we are of the view that the disallowance should have been restricted to the amount for which details could not be furnished by the assessee. Accordingly, we set aside the order passed by Ld. CIT(A) on this issue and direct the AO to restrict the addition to ₹ 9,88,29,444/- on this issue. Addition relating to accrual entries - AO noticed that the assessee company has posted accrual entries in all expenses account in order to match the ledger amount with the amount shown in the P L account - disallowance u/s. 40(a)(ia) - HELD THAT:- CIT(A) has extracted the reconciliation statement with regard to the other reconciliation items (referred as 'miscellaneous accruals') which is not relevant to the present issue. Further, in paragraph 13.2, extracted above the Ld. CIT(A) has observed that the assessee has demonstrated that the above said amount has already been disallowed in determination of taxable income for assessment year 2008-09. However, it appears that the assessee has not submitted so before Ld. CIT(A). Accordingly, there was confusion in the mind of Ld. CIT(A) on this issue.Disallowance to the extent reclassifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ressed. 3. The revenue is in appeal assailing the decision of Ld. CIT(A) in deleting the addition relating to miscellaneous accrual entries amounting to ₹ 88.01 crores. 4. The assessee company is engaged in the business of manufacturing, trading and maintenance of computer equipments, printers and accessories. It also renders services relating to the same. The assessment in the hands of the assessee were originally completed u/s. 143(3) of the Income-tax Act, 1961 ['the Act' for short] on 25.11.2011. Subsequently, the A.O. reopened the assessment by issuing notice u/s. 148 of the Act on 25.3.2013. The A.O. completed the assessment by making various additions. In the appellate proceedings, the assessee got partial relief and hence both the parties have filed these appeals on the issues mentioned above. 5. We shall first take up the appeal filed by the assessee. The only issue that remains for our consideration relates to the issue relating to disallowance of other reconciliation items. The facts relating to the same are discussed in brief. During the course of assessment proceedings, the A.O. asked the assessee to reconcile the turnover reported in sales tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince the details called for by the AO were more than five years old, the assessee could not furnish full details as sought by the AO. He submitted that the assessee furnished certain details before Ld. CIT(A) and hence he called for a remand report from the AO. The assessing officer furnished the report as under:_ Return/reverse/write-back, Toners, cartridge and third party payouts, forgiveness of debt (FOD), excise duty, sale of assets, credit noted posted to revenue accounts, booking in discount account - Details in respect of miscellaneous accruals Remark:-It is noted that total adjustments on the above-mentioned categories made in assessment was ₹ 167.59 crores. However, the assessee submitted details totaling to ₹ 159.56 crores leaving the difference of ₹ 10.21 crores. The ARs submitted that, it is nothing but difference due to reclassification. Addition as per assessment order Amount as per submission Difference Toner Cartridge 12,02,05,485 Excise duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as furnished details, even though it could not make one to one tally. In respect of 'Discount Account', the assessee could not furnish details to the tune of ₹ 2,05,88,135/-. Similarly in respect of 'Other item', the assessee could not furnish details to the tune of ₹ 7,82,41,309/-. The total of both these amounts works out to ₹ 9,88,29,444/-. 8. Despite furnishing details, we notice that the Ld. CIT(A) has confirmed disallowance of ₹ 167.58 crores. In our view, this is not justified. Accordingly, we are of the view that the disallowance should have been restricted to the amount for which details could not be furnished by the assessee. Accordingly, we set aside the order passed by Ld. CIT(A) on this issue and direct the AO to restrict the addition to ₹ 9,88,29,444/- on this issue. 9. We shall now take up the appeal filed by the revenue, wherein the revenue is aggrieved by the decision of Ld. CIT(A) in deleting the addition of ₹ 88.01 crores relating to accrual entries. 10. The A.O. noticed that the assessee company has posted accrual entries in all expenses account in order to match the ledger amount with the amount shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her submitted that as mentioned in paragraph 5 of the remand report dated March 28, 2018, the Assessing Officer has verified and confirmed the details with respect to the miscellaneous accrual entries. It is seen that the disallowance of a sum of ₹ 88,01,13,420/- representing accrual entries in various expenses ledger on the contention that the same ought to be disallowed u/s. 37 of the Act as contingent liability. During the appellate proceedings the appellant has demonstrated that the said amount has already been disallowed in the determination of taxable income for AY 2008-09 and therefore, such addition leads to double disallowance of the same amount. In view of the same the grounds taken are hereby allowed. 12. We notice that the remand report furnished by the assessing officer is placed at page nos. 264 to 267 of the paper book. A perusal of the same would show that the A.O. has not furnished any specific comment with regard to the disallowance of ₹ 88.01 crores relating to accrual entries. The AO has made general observation in respect of other reconciliation item and miscellaneous accruals by stating that the time given to him was not sufficient in order ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
