Dismissed

Pr. Commissioner of Income TAX-1, Delhi v. Fieldfresh Foods Pvt. Ltd.

Delhi HC2 Jul 2024ITA/314/2024

Case brief

AI extract

What is this about?

Revenue appealed against a Tribunal order deleting additions for provision for purchase of finished goods and a provisional expense. Since debit and credit entries balanced out making the effect revenue neutral, the High Court found no substantial question of law arose.

What did the court decide?

Delay of 34 days in filing condoned; appeal dismissed, Tribunal order left undisturbed.

Pr. Commissioner of Income TAX-1, Delhi Vs Fieldfresh Foods Pvt. Ltd. — Income Tax | Delhi HC (2024)

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$~32

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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- ITA 314/2024

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PR. COMMISSIONER OF INCOME TAX-1, DELHI .... Appellant Through: Mr. Sanjay Kumar, Adv.

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versus

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FIELDFRESH FOODS PVT. LTD. .... Respondent Through: None CORAM:

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HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE RAVINDER DUDEJA

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O R D E R

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% 02.07.2024

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CM APPL. 36009/2024 (34 days delay in filing)

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Bearing in mind the disclosures made, the delay of 34 days in filing the appeal is condoned.

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Application stands disposed of. ITA 314/2024

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The Principal Commissioner impugns the order of the Income Tax Appellate Tribunal [ “Tribunal” ] dated 23 November 2023, and has proposed the following questions of law for our consideration:-

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“A. Whether on the facts on the circumstances of the case and in law, the Ld. ITAT has erred in deleting the addition of Rs.22,31,99,107/- made by AO on account of provision for purchase of finished goods ignoring that the provisions made by assessee was not ascertained liability and it was contingent in nature as the goods not were received during the year, shown as the goods shown in the balance sheet as transit in nature and the payment has not actually been made, therefore, not allowable expenses under Section 37 of the Act?

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B. Whether on the facts on the circumstances of the case and in law, the Ld. ITAT has erred in deleting the addition of

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This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/07/2024 at 14:21:26

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Rs.2,26,54,932/- made by AO on account of provisional expense ignoring that provision made by assessee was not ascertained liability and it was contingent in nature and the assessee has no given any reply for the allowability of this expense?”

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We, however note, on a detailed analysis of the assessment order as framed, the Commissioner of Income Tax (Appeals) [“ CIT(A) ”] had while allowing the appeal observed as follows:-

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" 4.3.5 Thus, in light of the given facts it is clear that the said provision was infact payment for purchase of goods in transit whose entries were reversed in the beginning of the following year and the payments were made during F.Y. 2014-15 (A.Y. 2015-16). Since, the purchased goods were reflected as closing stock in the P&L Account (on the credit side) and in the balance sheet as goods in transit, these were infact ascertained and not contingent expenses. While, the goods were received, the bills were received later on. Hence, the claim of expense stands explained and proved, therefore allowable. Accordingly, the addition of Rs.22,31,99,107/on account of unascertained provision stands deleted ."

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Before us it is not disputed that since both the debit and credit entries had been balanced out, the effect would be revenue neutral.

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In that view of the matter, we find no substantial question which would merit consideration of this Court.

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The appeal shall consequently stand dismissed.

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YASHWANT VARMA, J.

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RAVINDER DUDEJA, J.

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JULY 2, 2024/ kk

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/07/2024 at 14:21:26

Pr. Commissioner of Income TAX-1, Delhi v. Fieldfresh Foods Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Pr. Commissioner of Income TAX-1, Delhi v. Fieldfresh Foods Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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