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TMI Blog2023 (10) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... h it represents the actual payment during the assessment year under consideration, which is allowable u/s 37(1) of the Act. 3. Facts of the case are that the assessee has an unproved gratuity fund. The assessee made a provision of Rs. 52,49,681/- and the same was disallowed u/s 40A(7) of the Act. However, it said to be made actual payment of Rs. 55,74,555/- and the same has been claimed u/s 37 of the Act while processing the return of income. This was disallowed by the ld. AO. On appeal, ld. CIT(A) observed that auditor is required to call for and verify the details of contribution to gratuity fund, etc. 3.1 The ld. CIT(A) observed that the Auditor is required to call for and verify the details of contributions to Gratuity Fund etc., alon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in interpretation, e.g., CBDT Circular, judgements, etc. 13.12 In case where a member is called upon to report on the revised accounts, then he must mention in the revised report that the said report is a revised report and a reference should be made to the earlier report also. In the revised report, reasons for revising the report should also be mentioned." 3.3. The ld. CIT(A) observed that as per Rule 12(2) of Income Tax Rules, 1962, as amended with effect from 01.04.2013, Tax Audit Report u/s. 44AB has to be mandatorily filed electronically within the prescribed due date by the auditor and any correction thereof also ought to be carried out by filing a revised Tax Audit Report electronically. Reasons for such corrections also have t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons, the ld. CIT(A) observed that the adjustment u/s.143(1)(a) of the Act made by CPC on the basis of the validly efiled Tax Audit Report on the issue of disallowance under section 43B is found to be consistent with facts on record and in accordance with law and hence does not warrant any interference. 3.6. The ld. CIT(A) further observed that the second issue raised by the assessee is regarding carry forward loss of current year. According to the assessee, the details of unabsorbed depreciation to be carried forward to next year has not been mentioned in Schedule CFL of the intimation issued by CPC and hence, the grounds raised by the assessee on this issue fail. 3.7. He further observed that the intimation u/s. 143(1) of the Act sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the processing of return through CPC. But, in any case from the facts it is clear that these amounts are already disallowed by the assessee and nothing more is to be disallowed, because total disallowance practically comes to Rs. 21,02,846/- and for that purpose no separate disallowance u/s. 143(1) of the Act can be made for an amount of Rs. 8,24,846/-. We direct the A.O to allow the same. This issue of assessee's appeal is allowed. 10. The next issue in this appeal of assessee as regards to the order of CIT(A) confirming the action of the A.O. in not considering the difference pertaining to payment made for gratuity to the employees which is of allowable expenditure as per Explanation 2 to s. 40A(7) of the Act. 11. We have heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed in the ITR as allowable deduction from total income. 12. In view of the above, we are of the view that the deduction of gratuity is available in substantive law and it cannot be disallowed merely by the reference of inconsistent entries in explanation of s. 143(1)(a) of the Act being a procedural provisions, it shall not take away the right confirmed in s. 37 r/w s. 40A(7) and s. 36(1)(v) of the Act. We direct the A.O to delete this disallowance. This issue of assessee's appeal is allowed." 4.1 Thus, he submitted that this issue cannot be dealt u/s 143(1) of the Act and even on merit the issue to be decided in favour of assessee. 5. The ld. D.R. relied on the order of the lower authorities. 6. We have heard the rival submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of accounts, the claim of assessee to be examined. Accordingly, the issue is remitted back to the file of AO for fresh consideration. 7. Next ground in this appeal is with regard to denial of carried forward current year loss of Rs. 54,43,53,518/-. The contention of the ld. AR is that though AO quantified the carried forward of current year loss at the tune of Rs. 53,87,78,963/- in the end in Annexure- Schedule CFL {as computed u/s 143(1)} in column no.(xiv) - current year losses to be carried forward (xiv-xv) - mentioned as '0', which is incorrect. It is to be permitted to the assessee to be carried forward to subsequent assessment year. In our opinion, the assessee claimed loss of current year to be carried forward at Rs. 54,43,53,578/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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