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TMI Blog2025 (4) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to as the "Act"), dated 25.12.2021 for Assessment Year 2020-21. 2. Grounds taken by the Revenue are reproduced as under: 1. Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was justified in admitting the additional evidence submitted by the assessee during the appellate proceedings in contravention of the provisions of Rule 46A(2) of the Income Tax Rules, 1962? 2. Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was justified in deciding the appeal of the assessee based on the additional evidence proceedings, without giving an opportunity to the AO as per the provisions of Rule 46A(3) of the Income Tax Rules, 1962? 3. In the course of hearing, ld. Counsel for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any law for the time being in force u/s. 37 of the Act" under the heading 'amounts debited to the profit and loss account, to the extent disallowable u/s. 37'. 5.1. In respect of the second addition towards liability of contingent nature, assessee submitted that this amount was reported in the audited balance sheet under Schedule 12 'significant accounting policies and notes on accounts' in compliance of disclosure requirements. This amount in the nature of contingent liability is neither debited to the profit and loss account for the year under consideration nor any deduction is claimed in the return of income. It is mentioned in the notes of accounts only for disclosure purposes. Thus, when no deduction has been claimed of this amount in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit and loss account nor in the return of income nor as deduction in the computation of income. The disallowance of the contingent liability is due to an inadvertent error in reporting by the auditor in column 21(g) of the tax audit report. As the appellant did not debit this contingent liability in its profit and loss account or return of income, the adjustment of INR 4,10,88,888/- would be unjust and impose an undue burden on the assessee. Consequently, the appeal of the assessee on this ground is upheld." 7. Before us, ld. Sr. DR contended that relief has been granted to the assessee by ld. CIT(A) by admitting the additional evidence and deciding the same without giving opportunity to the ld. Assessing Officer as per provisions of Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the tax auditor while reporting it in column 21(g) of the tax audit report. Based on his examination of the records, he has noted that assessee did not claim the contingent liability as an expense, neither in the profit and loss account nor in the return of income as a deduction while computing its total income. This is a verifiable fact from the records which were already available with the Department when the assessee filed its return of income on its portal. Considering the facts and the material on record, we do not find any infirmity in the fact based findings arrived at by ld. CIT(A) in granting relief to the assessee. Accordingly, grounds raised by the Revenue are dismissed. 10. In the result, appeal of the Revenue is dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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