Paradeep Phosphates Private Limited, Bhubaneswar V. Pr.CIT, -1, Bhubaneswar

ITA 104/CTK/2022

AI Insights

The case involves Paradeep Phosphates Ltd., which filed appeals against the orders of the CIT(A) and Pr. CIT, Bhubaneswar, concerning the assessment years 2011-12 and 2015-16. The primary issue in both appeals was the treatment of provisions for leave encashment under section 43B(f) of the Income Tax Act. The assessee contested the addition of these provisions without allowing actual expenditure. The Tribunal, referencing the Supreme Court's decision in Exide Industries Ltd., ruled that leave encashment should be allowed on actual payment basis.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300319 (ITAT-CUTTACK)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 11-01-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 29-05-2022
• Other Referred Cases: UOI Vs. Exide Industries Ltd. 425 ITR 1 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE AND ARUN KHODPIA, ACCOUNTANT MEMBER Paradeep Phosphates Ltd., 5 th floor, Bayan Bhawan, J.N.Road, Kharvel Nagar, Bhubaneswar. PAN/GIR No. (Appellant Paradeep Phosphates Ltd., 5 th floor, Bayan Bhawan, J.N.Road, Kharvel Nagar, Bhubaneswar. PAN/GIR No. (Appellant Per Bench ITA No.103/CTK/2021: AY This is an appeal filed by the assessee against the order of the ld CIT(A), National Faceless Appeal Centre (NFAC), Delhi IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI GEORGE MATHAN, JUDICIAL AND ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.103/CTK/2022 Assessment Year : 2011-12 Paradeep Phosphates Ltd., floor, Bayan Bhawan, J.N.Road, Kharvel Nagar, Bhubaneswar. Vs. Dy. CIT, Corporate Circle 1(2),Bhubaneswar. PAN/GIR No.AABCP 3276 D (Appellant) .. ( Respondent ITA No.104/CTK/2022 Assessment Year : 2015-16 Paradeep Phosphates Ltd., floor, Bayan Bhawan, J.N.Road, Kharvel Nagar, Bhubaneswar. Vs. Pr. CIT, Bhubaneswar. PAN/GIR No.AABCP 3276 D (Appellant) .. ( Respondent Assessee by : S/Shri B.K.Mohapatra/A.K.Sabat, CAs Revenue by : Shri M.K.Gautam, Date of Hearing : 12 /01 Date of Pronouncement : 12/01 O R D E R ITA No.103/CTK/2021: AY- 2011-12 This is an appeal filed by the assessee against the order of the ld , National Faceless Appeal Centre (NFAC), Delhi Page1 | 4 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER Dy. CIT, Corporate Circle 1(2),Bhubaneswar. Respondent) Bhubaneswar. Respondent) B.K.Mohapatra/A.K.Sabat, CAs , CIT DR 01/2023 /01/2023 This is an appeal filed by the assessee against the order of the ld , National Faceless Appeal Centre (NFAC), Delhi dated 22.12.2021 ITA No.103/CTK/2022 Assessment Year : 2011-12 ITA No.104/CTK/2022 Assessment Year : 2015-16 Page2 | 4 in Appeal No. ITBA/NFAC/S/250/2021-22/1038018437(1) for the assessment year 2011-12. 2. S/Shri B.K.Mohapatra/A.K.Sabat, ARs appeared for the assessee and Shri M.K.Gautam, ld CIT DR appeared for the revenue. 3. It was submitted by ld AR that the only issue in assessee’s appeal was against the action of the ld CIT(A) in upholding the action of the Assessing Officer in making the addition of the provisions for leave encashment u/s.43B(f) of the Act without allowing actual expenditure. 4. It was fairly agreed by both the sides that the issue was squarely covered by the decision of the Hon’ble Supreme Court in the case of UOI Vs. Exide Industries Ltd. 425 ITR 1 (SC), wherein, it has been held that the leave encashment is liable to be allowed on actual payment. 5. We have considered the rival submissions. As it is noticed that the issue is squarely covered by the decision of Hon’ble Supreme Court in the case of Exide Industries Ltd (supra), the Assessing Officer is directed to grant the assessee the benefit of deduction of leave encashment on actual payment. 6. The assessee has also raised other grounds, which have not been argued, therefore, they are not being considered. 7. In the result, appeal of the assessee is partly allowed. ITA No.103/CTK/2022 Assessment Year : 2011-12 ITA No.104/CTK/2022 Assessment Year : 2015-16 Page3 | 4 ITA No.104/CTK/2022: AY: 2015-16 8. This is an appeal filed by the assessee against the order of the ld Pr. CIT-1, Bhubaneswar dated 19.3.2020 in Appeal No. ITBA/COM/F/17/2019- 20/1026766936(1) for the assessment year 2015-16. 9. It was submitted by ld AR that the only issue in the appeal was against the action of the Pr. CIT-1, Bhubaneswar in directing the Assessing Officer to bring to tax the provisions for leave encashment u/s.43B(f) of the Act. It was the submission that the pr. CIT has not given direction to allow the same on actual payments. It was the prayer that in view of the decision of the Hon’ble Supreme Court in the case of Exide Industries Ltd., (supra), the order of the Pr. CIT may be modified to direct the AO to consider the allowance on actual payment. 10. In reply, ld CIT DR submitted that admittedly, in view of the decision of the Hon’ble Supreme Court in the case of Exide Industries Ltd (supra), the leave encashment is liable to be allowed on actual payment. Further, it was the submission that the Tribunal could not modify the order of the Pr. CIT on issues, where show cause notice has not been issued. 11. We have considered the rival submissions. Admittedly, in the interest of justice, when the issue of leave encashment is to be considered, the allowability of the same on actual payment basis is also to be considered in view of the decision of the Hon’ble Supreme Court in the case ITA No.103/CTK/2022 Assessment Year : 2011-12 ITA No.104/CTK/2022 Assessment Year : 2015-16 Page4 | 4 of Exide Industries Ltd (supra). Consequently, the Assessing Officer while giving effect to the order of the Pr. CIT, passed under section 263 of the Act, shall consider the allowability on actual payment basis. 12. In the result, appeal of the assessee is partly allowed. Order dictated and pronounced in the open court on 12/01/2023. Sd/- sd/- (Arun Khodpia) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 12/01/2023 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Appellant : Paradeep Phosphates Ltd., 5 th floor, Bayan Bhawan, J.N.Road, Kharvel Nagar, Bhubaneswar 2. The Respondent: Dy. CIT, Corporate Circle 1(2),Bhubaneswar 3. The CIT(A)-1, Bhubaneswar 4. Pr.CIT-1, Bhubaneswar 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//