Case Number: ITA 1810/DEL/2022
Appellant: KUCHHAL UDYOG, SOUTH DELHI
Respondent: ACIT, Circle-42(1), New Delhi
Assessment Year: 2019-2020
Result: 2019-2020
Case Filed On: 2022-08-10
Order Type: Final Tribunal Order
Date of Order: 2023-01-16
Pronounced On: 2023-01-16
The present appeal was filed by Kuchhal Udyog against the order of the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 28.06.2022, pertaining to the assessment year 2019-20. The primary issue under consideration was the disallowance of ESI/EPF expenses amounting to Rs. 145,375.
The assessee, Kuchhal Udyog, located at S-30, Greater Kailash Part-II, New Delhi, filed an appeal against the disallowance of expenses related to Employee State Insurance (ESI) and Employee Provident Fund (EPF) for the assessment year 2019-20. The Assessing Officer (AO) had made an addition by adjusting the amount under section 143(1) of the Income-tax Act, 1961.
During the hearing, the appellant, represented by Shri Sanjay Mehra, CA, argued that the issue involved was the disallowance of ESI/EPF expenses. It was contended that the AO had made the addition by making an adjustment under section 143(1) of the Income-tax Act, 1961, amounting to Rs. 31,437 and raised a demand of Rs. 4,260.
It was further submitted that the assessee had mistakenly mentioned the income as Rs. 6,74,480 in the appeal before the CIT(A) instead of Rs. 5,29,105, resulting in an incorrect addition of Rs. 1,08,890.
On the other hand, the Departmental Representative (DR), Shri Om Parkash, argued that the disallowance of ESI and EPF expenditure was in line with the Hon’ble Supreme Court’s decision and various Tribunal decisions. Thus, the AO’s findings should be upheld.
After considering the submissions, the Tribunal observed that the issue of disallowance of ESI/EPF expenses required verification at the AO’s end. The Tribunal noted the error in the income figure mentioned in the appeal and the need to verify the correct amount.
The Tribunal set aside the impugned order and restored the issue to the AO for verification of the correct amount and to decide the case in accordance with the law. The appeal filed by the assessee was allowed for statistical purposes.
The Tribunal concluded that the AO was required to verify the correct amount related to ESI/EPF expenses and decide the case accordingly. The Tribunal allowed the appeal for statistical purposes, emphasizing the need for accurate verification of the income figures and related disallowance.
Order Pronounced: 16.01.2023
Judicial Member: Shri Kul Bharat
Assistant Registrar: ITAT, New Delhi
Disallowance of ESI/EPF Expenses for AY 2019-20: Kuchhal Udyog vs. ACIT, Circle-42(1), New Delhi
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