Makarpura Industrial Estate Coop. Bank Ltd. vs. ACIT

Parties Involved

Facts Summary

The case involves an appeal by the Revenue against the order of the Additional/Joint Commissioner of Income Tax (A)-1, Ludhiana dated 20.03.2025 for the Assessment Year (A.Y.) 2021-22. The order in question arose from an order issued under Section 143(1) of the Income Tax Act, 1961 by the CPC dated 16.11.2022. The Revenue appealed against the deletion of an addition of Rs.2,69,96,801/- made by the CPC on account of contingent liability debited in P&L Account as reported by the Auditor in the tax audit report. The assessee supported the order of the Ld. CIT(A) deleting the addition of Rs.2,69,96,801/- pertaining to DAE fund and guarantee, which were contingent liabilities.…

Legal Issues

• 1. Whether the Ld. CIT(A) erred in deleting the addition of Rs.2,69,96,801/- made by the CPC on account of contingent liability.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

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