The Income Tax Appellate Tribunal Ahmedabad “C” Bench has recently, while allowing an appeal filed by the Revenue, held that deletion of disallowance under section 40(a) is not valid in the absence of a verification on the inclusion of amount in the income of the asssessee.
The aforesaid observation was made by the Tribunal when an appeal was filed before it by the Revenue, opposing the order dated 22.01.2019 passed by the Commissioner of Income Tax (Appeals)-3, Ahmedabad, as against the Assessment order passed under section 154 of the Income Tax Act, 1961 relating to the Assessment Year (A.Y) 2009-10.
The grounds of appeal as raised by the Review being that the CIT(A) has erred in law and on facts in deleting the addition of Rs. 14,95,961/- made by Assessing Officer on account of disallowance made u/s 40(a)(ia), the following was the observation of the tribunal while allowing the Revenue’s appeal in the open court:
“Heard both the parties and perused the materials available on record. We find that the ld. CIT(A) directed the assessing officer to verify whether the payee has already offered the amount as income in the Return of income. However, concluded that the addition made by the A.O. is deleted, which is self-contrary to the findings made by the ld. CIT(A).
Therefore, it is appropriate to remit the case back to the file of the Assessing Officer for limited purpose of verification, whether the payee has already offered the amount as income in the Return of Income and make appropriate disallowance pursuant to the verification thereon.
In the result, the appeal filed by the Revenue is allowed for statistical purpose.”
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