Manufacturing firm wins appeal against tax order, provision to be adjusted post writ petition resolution.

The tribunal allowed the appeal filed by a manufacturing firm against the National Faceless Appeal Centre's order adding Rs. 8,95,771 for entry tax provision. The appellant had already paid advance entry tax and made a provision, which was to be adjusted after a pending writ petition's disposal. The tribunal directed that the provision would be adjusted from the advance payment after the writ petition resolution by the High Court, with consequential tax effects to be considered per the High Court's order. The appeal was allowed, and the decision was rendered on 09.06.2022.

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Issues:
Appeal against order of National Faceless Appeal Centre regarding addition of provision for entry tax.

Analysis:
The appellant, a firm engaged in manufacturing coke, filed an appeal against the order of the National Faceless Appeal Centre, challenging the addition of Rs. 8,95,771 on account of provision for entry tax. The original assessment determined the total income at Rs. 43,13,44,440, with an addition made by the Assessing Officer. Subsequently, a proceeding under section 263 was initiated, leading to a revised assessment. The appellant contended that the provision for entry tax was made to protect its liability and was debited to the profit and loss account. The appellant had paid advance entry tax, and the provision was to be adjusted after the disposal of a pending writ petition regarding the applicability of entry tax. The tribunal noted that the appellant had already paid the entry tax in advance and allowed the appeal, directing that the provision made would be adjusted from the advance payment after the disposal of the writ petition by the High Court. The consequential tax effects were to be considered as per the High Court's order.

The tribunal considered the submissions of both parties and found that the appellant had paid advance entry tax and made a provision for entry tax, which was to be adjusted after the disposal of a pending writ petition. The tribunal allowed the appeal, stating that the provision made by the appellant would be adjusted from the advance payment entry tax after the disposal of the writ petition. The tribunal emphasized that the consequential tax effects should be taken into account in accordance with the High Court's order. The appeal was allowed, and the order was pronounced in open court on 09.06.2022.

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