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TMI Blog2024 (12) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... of case and in law, the order passed by the Commissioner of Income Tax (Appeal) is bad-in-law and arbitrary. 2. On the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeal) erred in confirming the addition of Rs. 71,375/- made by the assessing officer on account of Gratuity. 3. On the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeal) erred in confirming the addition of Rs. 634757/- made by the assessing officer on account of Bonus. 4. On the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeal) erred in confirming the addition of Rs. 7,15,070/- made by the assessing officer on account of Gratuity Payable. 5. On the facts and cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Return on 29.09.2011 declaring income of Rs. 4,72,488/-. After scrutiny, the assessment was completed making following additions/disallowances: i. Income Tax debited to P & L account not offered for tax Rs. 1,76,616/- ii. Interest on late payment of service tax Rs. 2,03,907/- treated as penal in nature. iii. Gratuity debited to P & L account deposited in unapproved gratuity fund Rs. 71,375/- iv. Bonus and gratuity shown payable in the balance sheet not paid before filing the ITR 13,49,827/- (6,34,757 + 7,15,070/-) v. Discrepancy between receipts as per 26AS and P & L account Rs. 68,03,907/- 3.1 Aggrieved, the appellant/assessee filed appeal before the Ld. CIT(A), who upheld the additions made on account of gratuity, bonus and dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised by Mahindra & Mahindra and or the appellant/assessee, which also got revealed from the copy of ledger account of the appellant/assessee in the books of account of Mahindra & Mahindra, which was made available by the AO,to the appellant/assessee. 4.2 Further, the Ld. AR submitted as under: "6.3. If the amount of Rs. 68,03,907/- added by A.O. as alleged undisclosed income on account of alleged excess credit by Mahindra and short debited by appellant is accepted, the books of accounts of assessee would show receivable of Rs. 73,10,370/- (Rs.506463 +Rs.6803907) as against receivable of Rs. 35,48,330/- shown by Mahindra thus increasing the difference to Rs. 1,08,58,700/-. Thus, by making addition, the account with Mahindra has not been r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a case where Mahindra have not accounted for the bills raised by the appellant on accrual basis. The various bills raised by the appellant have either been accounted for late by the Mahindra or has not been fully recorded in their books. For their discrepancy, adverse inference cannot be drawn in the hand of the appellant particularly when there is no case for any amount being not credited by the appellant in its books. On the contrary, the amounts credited by the assessee in its books by debiting the account of Mahindra is more than what Mahindra has correspondingly credited to assessee's account. 6.5. The opening balance as on 01.04.2010 of "Mahindra" in the books of appellant is Rs. 18,44,830- (Dr.), as against debit balance of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd.143 taxmann.com 178, she submitted that the disallowances of Gratuity of Rs. 71,375/- debited to the Profit & Loss Account and Bonus and gratuity of Rs. 13,49,827/- (6,34,757 + 7,15,070/-) shown payable in the Balance Sheet of the appellant/assessee, were justified and needed to be sustained. 5.1 She further submitted that the appellant/assessee had maintained its account on mercantile basis and therefore, its income had to be taxed on accrual basis. The Mahindra & Mahindra, as per contract, used to pass the bills raised by the appellant/assessee after proper verification having checks & balances embedded therein. Thereafter, it claimed the same as expenses in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are of the considered view that this issue needs to be decided a fresh in view of the decision of the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra). We therefore, set aside this issue and remit the disallowance of Bonus & gratuity of Rs. 13,49,827/- back to the file of the AO to be decided accordingly keeping in view the decision of the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra). 8. On the issue of addition of Rs. 68,03,907/-, we find merit in the submission of the Ld. Sr. DR that this issue requires verification & reconciliation of receipts as per 26AS vis-à-vis receipts as per the books of account/Profit & Loss Account of the appellant/assessee. We therefore, set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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