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TMI Blog2023 (2) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... all the details. If upon verification, it is found that the amount has already been disallowed on account of the provision for gratuity under section 40A(7) of the Act then to that extent the disallowance under section 43B of the Act be deleted, otherwise the same will result in double disallowance of the same amount. Similarly, as regards the sum it is found that the amount has been paid by the assessee during the year then relief be granted to the assessee as per law. Needless to mention that no order shall be passed without affording reasonable opportunity of being heard to the assessee. As a result, the grounds raised by the assessee are allowed for statistical purposes. - ITA No.2553/Mum./2022 - - - Dated:- 12-1-2023 - SHRI OM P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts return of income, sum of Rs.69,692/- was already paid by the Appellant during the year and same ought not to have been disallowed, however, while filing its return of income the Appellant inadvertently disallowed the gratuity paid during the year of Rs.69.692/- u/s 40A(7) of the Act; hence the AO shall be directed to allow the same as deductible expense. 3. The brief facts of the case as emanating from the record are: The assessee is a private limited company and is an authorised dealer of Toyota, engaged in the business of trading in vehicles. For the year under consideration, the assessee filed its return of income on 15/02/2021, declaring a total loss of Rs.3,05,78,700. The return filed by the assessee was processed vide intimati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dictory. As per the appellant's submission, it made a provision for gratuity of Rs. 12,16,766/- during the year and made a gratuity payment of Rs. 69,692/- to one of the employees. In that situation the total disallowance under sec. 40A(7) cannot be sum of these two amounts, because, once a payment of gratuity has actually been made to the employee, no disallowance for same is required to be made. Also, the sections 40A(7) and 438 of the Act operate in separate territories. Sec. 40A(7) deals with provisions for gratuity made during the year and sec. 43B deals with the payments of gratuity required to be made by the employer but not actually made during the year before the filing of return. In the present case, the Auditor has categorica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent of Rs.12,86,458 though under the wrong provision i.e. section 40A(7) of the Act. The learned AR also submitted that out of the aforesaid amount, an amount of Rs.69,692 has already been paid by the assessee during the year, therefore the same is allowable under section 43B of the Act. Insofar as Rs.12,16,766 is concerned, since the same has already been disallowed by the assessee, the impugned addition will result in a double disallowance. 6. On the contrary, the learned Departmental Representative by vehemently relying upon the impugned order submitted that the assessee did not file any revised return of income even after becoming aware of the mistake in its return of income. 7. We have considered the rival submissions and peru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs.12,16,766, under section 43B of the Act will result in a double disallowance. It is also the submission of the assessee that out of the aforesaid sum of Rs.12,86,458 an amount of Rs.69,692 has been paid by the assessee during the year and thus the disallowance under section 40A(7) of the Act to this extent is due to inadvertence. After careful perusal of the documents forming part of the paper book and the orders under consideration, we are of the considered opinion that this issue be remanded to the jurisdictional Assessing Officer for de novo adjudication after necessary verification/examination of all the details. If upon verification, it is found that the amount of Rs.12,16,766 has already been disallowed on account of the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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