TaxTMI 
TaxTMI 
2022 (1) TMI 963
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....quested the bench to keep the same open. Accordingly, the ground relating to validity of reopening of assessment is kept open. The grounds relating to other two issues are dismissed as not pressed. 3. The revenue is in appeal assailing the decision of Ld. CIT(A) in deleting the addition relating to miscellaneous accrual entries amounting to Rs. 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 reconciliati....
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....see 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 Rs. 167.59 crores. However, the assessee submitted details totaling to Rs. 159.56 crores leaving the difference of Rs. 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 54,57,83,616 Forgiveness of debt 30,85,75,018 Sub total 95,93,91,564 97,45,64,146 Sale of Capital asset 6,47,59,479 6,80,85,398 33,25,915 Credit note 16,56,61,853 16,57,22,2....
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....ssue and direct the AO to restrict the addition to Rs. 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 Rs. 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 in the P&L account. The assessee explained that it has passed accrual entries in respect of liabilities which crystalised on or before 31.3.2008. The A.O. noticed that the aggregate amount of accrual entries worked out to Rs. 88.01 crores. He took the view that the assessee should have deducted tax at source u/s. 40(a)(ia) of the Act. However, the A.O. noticed that the assessee has disallowed a sum of Rs. 48.14 crores only in the computation of total income u/s. 40(a)(ia) of the Act. In the absence of details, the A.O. took the view that the accrual entries are contingent liabilities and accordingly disallowed the above said amount of Rs. 88.01 crores. 11. Before Ld. CIT(A), the assessee submitted that the above said amount of Rs. 88.01 crores con....
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....ed 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 Rs. 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 to verify voluminous details. However, the Ld. CIT(A) has observed that the A.O. has offered his comments in respect of this item also. However, the Ld. 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. 13. Be that as it may, the assessee has stated that a sum ....