2022 (11) TMI 716

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....has erred, both on facts and in law, in upholding the addition/ disallowances u/s 43B Rs. 14,18,067/- 2. The CIT(A) has erred, both on facts and in law, in upholding the addition/ disallowances u/s 40A(7) Rs'27'59'188/- 3. In upholding the additions/ disallowances made by the AO u/s 43B and 40A(7), the CIT(A) has ignored the material available on record/ submitted both at the assessment stage and the appellate stage 4. The action of the CIT(A) in placing reliance solely on the Tax Audit Report of the assessee while ignoring the audited accounts and explanations provided is unjust, illegal, arbitrary, unwarranted. 5. The action of the CIT(A) in upholding the additions/ disallowances u/s 40A(7) ....

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.... GROUND NO. 1 6. The Ld. Counsel for the assessee drawn our attention to the balance sheet produced at page 85 and 83 and the copy of leave with wages payable for the year ended 31.03.2015 for the year under consideration which depicts the details hereunder:-   As per Copy of Account(Rs.) As per Balance Sheet (Rs.) Opening balance of leave with wages payable as at 01.04.2014 (PB 138) 46,10,159 (P 85) 4,82,769   Less: Paid (PB 138) 3,04,428 (P 83) 41,27,390   43,05,728 46,10,159 Add: Amount of leave with wages payable liability debited for the year ended 31.03.2015 PB 138 11,69,480 (P 85) 9,89,738 (Rs.54,75,211 - 43,05,731)   (P 83) 44,85,473   54,75,211....

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....1,69,480-Rs. 3,04,428 = 8,65,052 which has been added back in the computation. Ld. AO and the Ld. CIT(A) have considered and picked up the figure of Rs. 49,97,853/- mentioned in the Tax Audit Report wherein the assessee has specifically mentioned the figure of Rs. 4,77,358/- paid against leave encashment in the upper row against 26(i)(B)(a). 11. The Ld. CIT(A) observed that the disallowance made on the basis of observation of tax audit report u/s 44AB of the Act and the assessee fail to give proper explanation on that count. It is found that the Ld. A.O has not raised the query on the said issue but suo-moto disallowed the claim of the expenditure. In our opinion, it has to be seen whether the assessee has paid this expenditure before the d....

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....also found that the difference between opening and closing balance amounting to Rs. 22,43,146/- has been added back in the computation of income at page 22 of the paper book (Rs. 1,03,60,792/- - Rs. 81,17,646/-). As per the gratuity payable account produced at paper book at page 141 wherein a sum of Rs. 74,919/- + 84785/- + 24231/- has been paid aggregating to Rs. 1,83,935/-. The computation of income at page 22 which is as under:- Gratuity 22,43,146 Bonus 17,398 Liability for leave encashment 8,65,052   31,25,596 14. We find force in the contention of the Ld. Counsel for the assessee that the Ld. AO as well as Ld. CIT(A) could not understand the tax audit report and made the addition which has been confirmed....