Soverign Tech Engineering Services P. ... vs Assessee

आयकर अपील य अ धकरण, मुंबई यायपीठ "ई" मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL" E" BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND AMIT SHUKLA, (JM) सव ी बी.आर.बा करन, लेखा सद य एवं अ मत शु ला, या यक सद य के सम

आयकर अपील सं./I.T.A. No.4778/Mum/2013 ( नधारण वष / Assessment Year :2009-10)

Sovereign Tech Engineering, बनाम/ Income Tax Officer, Services Pvt.Ltd., Ward 10(2)(2), Vs. 14, Mahindedr Chambers, Mumbai.

W.T. Patil Marg, Opposite Dukes Factory, Chembur, Mumbai-400071 (अपीलाथ /Appellant) .. ( यथ / Respondent)

थायी ले ख ा सं . /जीआइआर सं . /PAN/GIR No. :AAFCS7074Q

अपीलाथ ओर से / Appellant by Shri Anil Sathe यथ क ओर से/Respondent by Shri Smt. N V Nadkarni

सन ु वाई क तार ख / Date of Hearing :21.4.2015 घोषणा क तार ख /Date of Pronouncement :29.4.2015

आदे श / O R D E R

PER B.R. BASKARAN (AM)

The assessee has filed this appeal challenging the order dated 09- 04-2013 passed by ld.CIT(A)-22, Mumbai and it relates to the assessment year 2009-10. The assessee is aggrieved by the decision of Ld.CIT(A) in confirming the addition of Rs.3,33,287/- made by the AO u/s 41(1) of the Income Tax Act, 1961 (the Act).

2. We heard the parties and perused the records. Only issue contested in this appeal is whether the ld.CIT(A) was justified in confirming the assessment of Rs.3,33,287/- made u/s 41(1) of the Act. From the Tax Audit Report, the AO noticed that the Tax Auditor has reported that a sum 2 I T A N o . 4 7 7 8 / Mu m / 2 0 1 3

of Rs.3,33,287/-, being sundry creditors balance written off by the assessee, is chargeable to tax u/s 41(1) of the Act. Since the profit and loss account did not disclose the above said item separately, the assessing officer assessed the same as income of the assessee, which was also confirmed by Ld CIT(A).

3. Before us, the ld.AR submitted that the assessee had already offered the above said amount in the Profit and Loss account. He submitted that the assessee, instead of showing separately in the credit side of the Profit and loss account, has netted off the same against 'Sundry debit balances written off'. In this regard, the ld. AR invited our attention to page 8 of the paper book, wherein the assessee has furnished the details as to how sundry credit balance written off amount, referred above, was accounted for in the books of accounts. For the sake of convenience, we reproduce the same below:-

Particulars Amount Amount (Rs.) (Rs.) Amount disclosed in 3CD towards Sundry Credit Balance 3,33,287 written back

Extract of Tally Ledger-Sundry Credit Balance written back

Total of Credit Side (Total-A) 3,33,287 Total of Debit Side (Total B) (8,993) (Material Rejection from Kaizen CNC written off-CN 1 & 2)

Net Balance (Total A-B) 3,24,294 ##

This amount is transferred to Sundry Balance Written off account

Total Sundry Balance Written off (Total As per Ledger) 3,26,575 Less: Transferred from Sundry Credit Bal Written back 3,24,294 ## Grouped under "Miscellaneous expenses" in Schedule 'O' 2,281 3 I T A N o . 4 7 7 8 / Mu m / 2 0 1 3

On perusal of the above said statement, we find merit in the contention of the assessee. The assessee has debited a sum of Rs.2,281/- in the profit and loss account which is the net balance after adjustment of sundry credit balances written off account against Sundry debit balances written off account, meaning thereby the assessee has duly offered the sundry credit balance written off amount of Rs.3,33,281/- in the profit and loss account. Hence, we are of the view that the AO was not justified in disallowing the same again and the ld CIT(A) was not justified in confirming the same. Accordingly, we set aside the order of ld. CIT(A) and direct the AO to delete this addition.

4. In the result, the appeal filed by the assessee is allowed.

The above order was pronounced in the open court on 29th Apr, 2015.

th घोषणा खल ु े यायालय म दनांकः 29 Apr, 2015 को क गई ।

Sd sd

(अ मत शु ला / AMIT SHUKLA) (बी.आर.बा करन / B.R. BASKARAN) या यक सद य / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER

मंब ु ई Mumbai:29th Apr,2015.

व. न.स./ SRL , Sr. PS

आदे श क त ल प अ े षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent.

3. आयकर आयु त(अपील) / The CIT(A)- concerned

4. आयकर आयु त / CIT concerned

5. वभागीय त न ध, आयकर अपील य अ धकरण, मब ुं ई / DR, ITAT, Mumbai concerned

6. गाड फाईल / Guard file.

आदे शानस ु ार/ BY ORDER, True copy

सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai