TaxTMI 
TaxTMI 
2026 (8) TMI 354
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.... The description in column 21(d) and the reply filed is as under : (d)Disallowance/deemed income u/s. 40A(3) 1. On the basis of examination of books of accounts and other relevant documents/evidence, whether the expenditure covered u/s. 40A(3) read with rule 6DD were made by account payee cheque drawn on a bank or account payee bank draft. If not furnish the details The reply of the auditor in this column is negative. Thus the auditor has certified that the payments were not made by account payee cheque/account payee bank draft. On the basis of the Auditor's report in Form 3CD, the CPC, Bangalore has rightly disallowed the expenses amounting to Rs. 3,18,342/- reflecting in the column 21(d) as Disallowance/deemed income under section 40A(3). In view of these facts, this ground of appeal is dismissed. Ground C & D: Disallowance of Bank Guarantee of Rs. 1,75,00,000/- The said amount is mentioned in column 21(g) of Form 3CD uploaded by the appellant in ITBA as Particulars of any liability of a contingent nature. The column 21 of form 3 CD is regarding the expenses debited to the Profit and Loss account. The appellant in the audi....
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....nses. The assessee's appeal against the aforesaid adjustments was dismissed by the learned CIT(A) vide impugned appellate order dated 18/03/2025. The present appeal has been filed by the assessee against the aforesaid impugned appellate order of learned CIT(A). In the course of appellate proceedings in Income Tax Appellate Tribunal, a paper book containing the following particulars was filed from the assessee's side: PAPER BOOK SI. No. Particulars 1. Copy of Independent Auditor's Report as per companies Act, 2013 for the Financial Year 2019-20. 2. Copy of 'original' Form 3CA (Tax Audit Report) as per section 44AB, for the Financial Year 2019-20, dated 17 October, 2020. 3. Copy of Form 29 B for computing Book Profit 4. Copy of computation of Income for the Assessment Year 2020-21. 5. Copy of written submission dated 2nd June, 2022 filed before ld. Commissioner of Income Tax (Appeals)/ NFAC, Delhi for the Assessment Year 2020-21. 6. Copy of written submission dated 22nd October, 2022 filed before ld. Commissioner of Income Tax (Appeals)/ NFAC, Delhi for the Assessment Year 2020-21. 7. Copy of written submission da....
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....ed by the auditor rectifying the aforesaid mistake. He placed reliance on the order dated 08/05/2025 of the Ahmedabad Bench of the ITAT in the case of ACIT vs. Mahesh Mohanbhai Patel (HUF) in I.T.A. No. 1147/Ahd/2024, order dated 06/12/2013 of Delhi Bench of the ITAT in the case of DCIT vs. Dwarikadish Spinners Ltd. in I.T.A. No. 4782/Del/2012 and order dated 12/12/2011 of Kolkata Bench of the ITAT in the case of CIT vs. Kay Bee Industrial Alloys Pvt. Ltd. in I.T.A. No. 1032/Kol/2011. He also drew our attention to the copy of independent auditor's aforesaid report as per Companies Act. He also placed reliance on the aforesaid paper book, referred to in foregoing paragraph (B) of this order. (C.2) Learned D.R. submitted that the adjustment was made by Income-tax Department on the basis of documents filed by the assessee along with return of income; and If there was any mistake in reporting, in these documents, it was brought to the notice of the learned CIT(A) for the first time. Further, he submitted, although in the paper book the assessee has certified that documents mentioned at Sl. No. 1 to 10 of the index were placed before the authorities below; the fact is that docume....
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....the case cannot be decided without proper factual verification of the case at the level of the Assessing Officer. There could be many aspects requiring verification. What was the exact nature of the figure reported as contingent liability? Was it reported on gross basis or net basis? What were the accounting entries in the books of account? Does it have any connection with earlier and/or subsequent year(s)? etc. etc. Material on records are insufficient for a categorical decision by us, either way, on merits. In this set of facts and circumstances, we are in agreement with the submissions made by learned D.R. that the matter requires verification at the end of the Assessing Officer. We also note that learned CIT(A) did not provide any opportunity to the Assessing Officer to examine the documents filed for the first time during appellate proceedings before the learned CIT(A). Therefore, we remand this matter to the file of the Assessing Officer with the direction to pass order in accordance with law after providing reasonable opportunity to the assessee and after considering all relevant materials. (E.1) We now come to the second issue regarding addition amounting to Rs. 3,18,342....
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....red at clubs being cost for club services and facilities used NIL Particulars Amount in Rs. Remarks if any 6 Expenditure by way of penalty or fine for violation of any law for the time being force NIL Particulars Amount in Rs. Remarks if any 7 Expenditure by way of any other penalty or fine not covered above NIL Particulars Amount in Rs. Remarks if any 8 Expenditure incurred for any purpose which is an offence or which is prohibited by law NIL Particulars Amount in Rs. Remarks if any b) Amounts inadmissible under section 40(a) As payment to non-resident referred to in sub-clause (i) Details of payment on which tax is not deducted Date of payment Amount of payment Nature of payment Name of the payee PAN of the payee Address Line 1 Address Line 2 City or town or district PIDcode if any Remarks B Details of payment on which tax has been deducted but has not been paid during the previous year or in the subsequent year before the expiry of time prescribed under section 200(1) Amount of Addres Line 1 Addres s Line 2 ii As payment to resident referred to in sub-clause (ia) A Details of payment on which tax is not deducted ....