DCIT vs. The Rajasthan Small Industries Corporation Ltd.

Parties Involved

Facts Summary

The present appeal is filed by the revenue and is arising out of the order of the Ld. CIT(A), National Faceless Appeal Centre, Delhi [here in after “CIT(A)/NFAC”] dated 20.07.2023 for assessment year 2020-21. The brief facts of the case is that in this case an intimation u/s 143(1) of the Act was issued wherein an addition of Rs. 53,01,37,219/- was added u/s 37 of the Act, vide intimation order dated 23.12.2021. Against that intimation order the assessee preferred an appeal before the ld. CIT(A) who has allowed the appeal of the assessee vide order dated 20.07.2023 by observing as under:- The order of the CPC passed u/s 143(1) dated 23.12.2021 as well as grounds of the appeal, statement of facts and written submission filed by the appellant has been carefully considered. In essence, all the substantial grounds taken by the appellant relate to the action of the CPC regarding addition of Rs.53,01.37.219/-on account of Contingent Liabilities. During the course of appellate proceedings, the appellant has filed written submission relying upon the decision of the Hon'ble ITAT. New Delhi which has been respectfully considered. In the submission, it has been stated that the Contingent Liabilities which were disallowed was never been a part of P & L account or Balance Sheet of the appellant so should not be disallowed as the contingent liabilities not impacted the Profit figures of the assessee and these contingent liabilities of Rs. 53,01,37,219/- was only shown in the notes forming …

Legal Issues

• 1. Whether in the facts and circumstances and in law, the Ld. CIT(A) has erred in deleting the addition made by the AO CPC on account of contingent liability amounting to Rs. 53,01,37,219/- while the same is not allowed u/s 37 of the Income Tax Act, 1961.
• 2. The appellant craves leave to add, alter, amend, withdraw or insert any ground or grounds of appeal before or at the time of hearing of the appeal.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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