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TMI Blog2024 (5) TMI 1165X X X X Extracts X X X X X X X X Extracts X X X X ..... his case, the expenditure for gratuity on payment basis was not indicated in the Audit Report for disallowance. This fact has not been rebutted by the Revenue. Once, the impugned expenditure was not indicated in the Audit report for disallowance, the said amount is outside the preview of Section 143(1)(a)(iv) of the Act. Therefore, ADIT(CPC) had no jurisdiction to make any disallowance u/s. 143(1)(a)(iv) of the Act. In this case the ADIT had made disallowance u/s. 143(1)(a)(iv) therefore, the disallowance is outside the scope of section 143(1)(a)(iv) - Appeal raised by the assessee is allowed. - Shri S.S. Godara, Judicial Member And Dr. Dipak P. Ripote, Accountant Member For the Assessee : Shri Nikhil Patakh AR For the Revenue : Shri Ajay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce or annul the assessment. 3. On the facts and circumstances of the case and in law, the ld.CIT(A) erred in not disposing the same in the manner as provided in Sec.251(1)(a) of the Income Tax Act, 1961. 4. The Order of the ld.CIT(A) be set aside and that of the AO be restored. 5. The appellant craves leave to add, amend or alter any of the above grounds of appeal. 2. The Assessee in Cross Objection Appeal No.7/PUN/2024 raised the following grounds of appeal : A. On the facts and in the circumstances of the case and in law, the learned AO has erred in objecting the order of Ld.CIT(A) : 1. Disallowance under section 43B of the Act : The Respondent submits that the addition of Rs. 6.20 crore made by disallowing the gratuity payment under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 as per provision of law and if the same is found to be correct, then allow the same to the appellant. 5. Aggrieved by the order of the ld.CIT(A)[NFAC], the ld.Pr.CIT-3, Pune has filed appeal before this Tribunal and assessee filed Cross Objection appeal. Submission of ld.AR : 6. Ld.Authorised Representative(ld.AR) for the assessee filed a paper book containing 586 pages. Ld.AR vehemently argued that ld.ADIT, CPC has erred in making the adjustment u/s. 143(1)(a)(iv). Ld.AR submitted that in the Audit Report there was no mention of any such expenditure for which disallowance was required. Ld.AR took us through section 143(1)(a)(iv) of the Act. Ld.AR also took us through the Audit Report that there was no expenditure indicated in the Audit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely: (a) the total income or loss shall be computed after making the following adjustments, namely: (i) any arithmetical error in the return; (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; [(iii) disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under subsection (1) of section 139; (iv) disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return; (v) disallowance of deduction claimed under sections 10AA, 80-IA, 80- IAB, 80- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r fee]; (d) an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to, the assessee under clause (c); and (e) the amount of refund due to the assessee in pursuance of the determination under clause (c) shall be granted to the assessee: Provided that an intimation shall also be sent to the assessee in a case where the loss declared in the return by the assessee is adjusted but no tax 86[, interest or fee] is payable by, or no refund is due to, him: Provided further that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the return is made. Explanation. For the purposes of this sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, the said amount is outside the preview of Section 143(1)(a)(iv) of the Act. Therefore, the ld.ADIT(CPC) had no jurisdiction to make any disallowance of Rs. 6,20,00,000/- u/s. 143(1)(a)(iv) of the Act. In this case the ADIT had made disallowance u/s. 143(1)(a)(iv) of the Act of Rs. 6,20,00,000/-, therefore, the disallowance is outside the scope of section 143(1)(a)(iv) of the Act. Accordingly, Cross Objection appeal raised by the assessee is allowed. ITA No.1072/PUN/2023 by Revenue : 10. Since we have decided the Cross Objection appeal filed by the assessee in favour of assessee, the Revenue s appeal becomes academic in nature. Therefore, though in principle, we agree with ld.DR that ld.CIT(A)[NFAC] does not have any power to set-aside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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