IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH, KOLKATA

Parties Involved

Facts Summary

The assessee, a firm, filed its return of income for A.Y. 2018-19 on 29.10.2018 declaring business income at Rs.3,52,372/-. The case was selected for Complete Scrutiny assessment under the E-assessment Scheme, 2019 due to 'Excess Contribution of Provident Fund, Superannuation Fund or Gratuity Fund.' The Assessing Officer completed the assessment and passed an order u/s.143(3) of the Act determining total income at Rs.48,86,770/- after making additions of Rs.5,43,556/- on account of disallowance u/s 40(b), Rs. 11,15,370/- on account of disallowance of purchases, and Rs.28,75,472/- on account of disallowance of labour payment. Aggrieved with these additions, the assessee preferred an appeal before the ld. CIT(A), which was dismissed. The assessee then filed a further appeal before the Tribunal.…

Legal Issues

• 1. Whether the order u/s 250 passed by the Ld. CIT (A), NFAC, Delhi is against the principle of natural justice.
• 2. Whether the Ld. AO ought not to have disallowed the remuneration paid to partners for Rs.5,43,556/-.
• 3. Whether the Ld. AO ought not to have disallowed a sum of Rs.11,15,380/- being 20% of purchases made by the appellant.
• 4. Whether the Ld. AO ought not to have disallowed a sum of Rs.28,75,472/- being 30% of labour payments made by the appellant.

Judgment Outcome

Decided in favour of Assessee.

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