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TMI Blog2025 (1) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout expressing any opinion on merits on this aspect, we deem it expedient to restore the matter to the file of designated AO. It shall be open to the assessee to place factual matrix before the AO and take such plea for evaluation of the AO. AO shall examine this aspect and fresh order in accordance with law after giving proper opportunity. AO shall thus recompute the amount of disallowance u/s 36(i)(va) if any, on the above basis, in accordance with law. Assessee shall be entitled to appropriate relevant u/s 36(i)(va) where it is found that deposits have been made towards PF/ESIC within the due date from the close of month of actual disbursement of salary/wages - Appeal of the assessee is allowed ex-parte for statistical purposes. Disallowing the business expenses - Assessee was awarded a contract by Whirlpool of India Limited and on the basis of back to back contracts, it has given the sub-contracts to Meliora Services. Assessee has completed the contract with the assistance of Meliora and paid the relevant job work charges after deducting relevant TDS. Assessee also claimed the relevant explanation only in its Profit Loss Account. AO has wrongly noticed that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to this difference and accordingly, the difference of Rs. 22,80,737/- was disallowed and added to the total income of the assessee. Thus the income of the assessee was assessed at Rs. 1,40,45,600/-. 3. Against the aforesaid order of the AO, assessee preferred appeal before the ld. CIT(A), who vide his impugned order dated 13.11.2023 dismissed the appeal of the assessee. 4. Aggrieved, assessee is an appeal before us raising following grounds of appeal:- 1. The learned assessing officer has erred in assessing the income of the assessee at Rs. 1,40,45,600/- as against the returned income of Rs. 80,11,440/- by the appellant. 2. The learned assessing officer erred in confirming the Income determined / assessed u/s 143(1) of the Income Tax Act 1961. 3. The learned assessing officer has erred in confirming the addition of Rs. 13,68,501/-on account of delay in payment of employee's contribution towards EPF ESI beyond the due dates u/s 36(1) (v) (a) of the Income Tax Act, 1961. 4. The learned assessing officer has erred in not considering the due dates for payment of Employees contribution of PF / ESIC from the month in which actual disbursement of salary is made. 5. The learned assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er se. as observed by the co-ordinate bench in Kanoi Paper and Industries Ltd vs. ACIT (2002) 75 TTJ 448 (Cal). This aspect has not been found to be examined by the Assessing Officer or CIT(A). Hence, without expressing any opinion on merits of this aspect, we deem it expedient to restore the matter to the file of designated AO and take such plea for evaluation of the AO. The AO shall examine in s aspect and fresh order in accordance with law after giving proper opportunity Unquote Copy Enclosed at Pages 42-47 Reliance is also placed in the case of Cargo Motors (Gujrat) Private Limited vs ACIT - ITA No.239IDELl2023 Dated 25/07/2023 wherein the Hon'ble ITAT relying on the judgement in the case Sentinel Consultants Private Limited Vs ACIT ITA No 7 8/Dell2023 Dated 12/06/2023 as above has remanded back the matter to the file of the assessing officer. The Hon'ble ITAT observed in para 7 of the order as follows: 7. The observations made in Sentinel Consultants Pvt. Ltd. shall apply mutatis mutandis. Consequently, we consider it expedient to restore the issue back to the file of AO for factual verification and redetermination in the issue on the light of determination made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices so raised were recorded as revenue under the head Sale of Services and offered to Tax. He further submitted that a copy of Ledger account of Whirlpool of India Limited is enclosed at Pages 103-105. He submitted that against the order received from Whirlpool, the assessee placed back-to-back purchase order to avail such services from the Meliora Services ( Meliora ) for a sum of Rs. 8,378,450/- (excluding the GST and levies) and the Meliora provided the services to the assessee and raised the invoices of Rs 83,78,450/- on assessee and the copies of summary of invoices raised by Meliora, c Invoices and Ledger Account of Meliora are attached at Pages 106-113 of the paper book. He further submitted that the assessee recorded and claimed the expenses under the head of Other Support Expenses - Sub head of Job Work Charges in the books of accounts as per Pages 114-115 of the paper book. He submitted that after deduction of TDS @1% on a sum of Rs 83,78,450/-, assessee made the payment to Meliora and copy of TDS Return for the respective periods are enclosed at pages 116-148 of the paper book. He, therefore, pleaded that the expenses as claimed in the books of accounts against the invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The CIT(A) in the first appeal has sustained the adjustments towards belated deposits of employees contribution to PF/ESIC in the light of the judgment rendered by the Hon ble Supreme Court in Checkmate Pvt. Ltd. vs. CIT (2022) 143 taxmann.com 178 (SC). The contention of the Assessee that such additions cannot be made under the umbrella of S. 143(1) is covered against the assessee the decision of the coordinate bench in the case of Weather Comfort Engineers Private Limited vs. ACIT-CPC ITA No. 959/Del/2021 order dated 15/02/2023. The action of CPC and CIT(A) thus cannot be faulted where some opportunity was admittedly given for e- response. 9.2 We now turn to alternate plea on behalf of the assessee for grant of deduction under general provisions for deduction of expenditure under S. 37 of the Act. We do not see any merit in such plea that the belated deposit of employees contributions to PF/ESIC governed under Section 36(1)(va) is also simultaneously amenable to deduction under Section 37(1) of the Act. In terms of the provision, Section 37(1) permits deduction of expenditure which is not in the nature of expenditure prescribed in Sections 30 to 36 of the Act and also not being i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing heard to the assessee and the assessee is at liberty to provide all the necessary information in support of its contention. 9. Since the above issue is squarely covered by the above decision, we are inclined to remit the issue back to the file of AO to consider the alternative plea of the assessee as per law after giving proper opportunity of being heard to the assessee. 10. With regard to Ground no.5, we observed that the assessee was awarded a contract of Rs. 1.06 crores by Whirlpool of India Limited and on the basis of back to back contracts, it has given the sub-contracts to Meliora Services. The assessee has completed the contract with the assistance of Meliora and paid the relevant job work charges after deducting relevant TDS. Assessee also claimed the relevant explanation of Rs. 83,78,450/- only in its Profit Loss Account. The Assessing Officer has wrongly noticed that the assessee has given contract to Meliora Services to the extent of Rs. 106,59,188/-. The Assessing Officer with the wrong information observed that the assessee has not deducted TDS on the difference amount of Rs. 22,80,737/-, accordingly proceeded to disallow the same. After considering the facts on re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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