DCIT, New Delhi V. M/s. Sahara India (Firm), Lucknow

ITA 1040/DEL/2012

• Counselvise Citation: 104020114 RSA 2012
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 10-12-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 01-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKAS SRIVASTAVA
• Assessee Lawyers: SUKHVEER CHAUDHARY
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H: NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER ITA NO. 1040/DEL/2012 ASSESSMENT YEAR: 2002-03 DCIT, CENTRAL CIRCLE 6, ROOM NO. 334, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI. VS. SAHARA INDIA (FIRM), 1, KAPOORTHALA COMPLEX, ALIGANJ, LUCKNOW. PAN NO. AAMFS0216L (APPELLANT) (RESPONDENT) & CROSS OBJECTION NO. 183/DEL/2012 ASSESSMENT YEAR: 2002-03 SAHARA INDIA (FIRM), 1, KAPOORTHALA COMPLEX, ALIGANJ, LUCKNOW. PAN NO. AAMFS0216L VS. DCIT, CENTRAL CIRCLE 6, ROOM NO. 334, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. VIKAS SRIVASTAVA, ADV. RESPONDENT BY: SH. SUKHVEER CHAUDHARY, SR. DR O R D E R PER S.V. MEHROTRA, A.M. THE APPEAL IS FILED BY THE REVENUE AND CROSS OBJEC TION BY THE ASSESSEE. BOTH OF THEM ARE DIRECTED AGAINST ORDER PASSED BY LD. CIT(A) DATED 26/12/2011 FOR A.Y. 2002-03. ITA NO. 1040 & CO NO. 183/D/2012 2 2. THE ASSESSEE FIRM, IN THE RELEVANT ASSESSMENT YE AR, WAS ENGAGED IN MOBILIZING DEPOSITS ON BEHALF OF PRINCIPALS, SERVIC ING THEREOF AND MANUFACTURING OF CONSUMER PRODUCTS. IT HAD FILED I TS RETURN OF INCOME DECLARING INCOME OF RS. 6,84,21,868/-. 3. THE ASSESSING OFFICER HAD MADE VARIOUS ADDITIONS , INTER-ALIA, OF RS. 1,20,28,241/- U/S 43B IN REGARD TO PROVISION FOR LE AVE ENCASHMENT. THE ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A), WHO VI DE HIS ORDER DATED 19/02/2010, WHILE PARTLY ALLOWING THE ASSESSEES AP PEAL, INTER-ALIA, RESTORED THE MATTER TO THE FILE OF AO IN REGARD TO ADDITION U/S 43B OBSERVING AS UNDER: 29.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE BY THE APPELLANT. I SEE THAT NO REFERENCE HAS BEEN GIVEN BY THE ASSESSING OFFICER TO THE REPLY FILED BY THE APPELLANT BEFORE THE AO. THE REPLY OF THE APPELLANT WHICH BASED ON FACTUAL MATRIX CANNOT BE IGNORED. IF THE FACTS IN THE SAID REPLY AS QUOTED IN THE WRITTEN SUBMISSINS OF T HE APPELLANT ARE CORRECT NO ADDITION U/S 43B IS SUSTAINABLE FOR LEAVE ENCASHMENT AMOUNT PAYABLE AS ON 31/03/2002. SIMILAR ADDITION MADE BY ASSESSING OFFICER STANDS DELETED BY MY PREDECESSOR IN A.Y. 1999-2000 ON APPEAL NO. 104/06-07 VIDE ORDER DATED 18/12/2008. I, THEREFORE, DELETE THE ADDITIO N OF RS. 1,20,28,241/- WITH THE DIRECTIONS TO THE ASSESSING OFFICER TO VERIFY THE AVERMENT MADE IN TH E ITA NO. 1040 & CO NO. 183/D/2012 3 WRITTEN SUBMISSIONS FILED BEFORE ME. THE GROUND IS ALLOWED SUBJECT TO THE ABOVE DIRECTIONS. 4. THE AO PASSED ORDER U/S 144/142(2A)/250 OF THE I NCOME TAX ACT ON 15/02/2011, INTER-ALIA, CONFIRMING THE ADDITION U/S 43B IN REGARD TO LEAVE ENCASHMENT OBSERVING AS UNDER: - THE LD. CIT(A) DELETED THE ADDITION WITH THE DIRECTIONS TO THE AO TO VERIFY THE AVERMENT BY THE ASSESSEE BEFORE HIM. THE SAME WAS VERIFIED AND THE CONTENTION OF THE ASSESSEE IS NOT FOUND TO BE CORRE CT. *NECESSARY DETAILSL ARE GIVEN BELOW. 5. LD. CIT(A), AFTER EXAMINING THE FACTS, PARTLY AL LOWED THE ASSESSEES APPEAL RESTRICTING THE ADDITION TO RS. 2,09,110/- O BSERVING AS UNDER: - 3.5 I HAVE GONE THROUGH THE SUBMISSION OF THE ASSESSEE AS WELL AS THE OBSERVATION OF THE ASSESSIN G OFFICER IS NOT FACTUALLY CORRECT. THE CIT(A) IN HI S ORDER IN PARA 29.3 HAS CLEARLY STATED THAT HE IS DELETING THE ADDITION OF RS. 1,20,28,241/- AND THE ASSESSING OFFICER IS ONLY TO VERIFY THE SUBMISSION GIVEN BY HIM. EVEN ON MERITS, IT IS SEEN IN ANNEXU RE 21(I) OF FORM NO. 3CD THAT THE CREDIT BALANCE OF LEAVE ENCASHMENT PAYABLE AS ON 01/04/2001 IS RS. 1,71,02,091/- AGAINST WHICH THE ASSESSEE HAS PAID RS. 1,71,15,597/- TILL MARCH, 2002. THUS, THERE IS AN EXCESS PAYMENT OF RS. 13,506/-. THE OPENING BALANCE OF RS. 1,71,02,091/- HAD ALREADY BEING OFFERED FOR TAX BECAUSE THE ASSESSEE WAS CLAIMING ITA NO. 1040 & CO NO. 183/D/2012 4 DEDUCTION ON THE BASIS OF ACTUAL PAYMENT. A PERUSA L OF THE COMPUTATION OF THE INCOME FOR THE A.Y. 2001- 02 SHOWS THAT A PROVISION FOR LEAVE ENCASHMENT AMOUNTING TO RS. 67,34,413/- HAS BEEN ADDED BACK TO THE INCOME OF THE ASSESSEE AND LEAVE ENCASHMENT AMOUNTING TO RS. 1,40,35,043/- HAS BEEN CLAIMED AS DEDUCTION ON THE BASIS OF ACTUAL PAYMENT. THUS, TH E OPENING BALANCE HAD ALREADY BEEN OFFERED FOR TAX AND THE ACTUAL PAYMENT MADE BY THE ASSESSEE TILL TH E DATE OF FILING THE RETURN IS RS. 2,24,12,063/- (RS. 1,71,15,597 + RS. 52,96,466). AS THE APPELLANT HAS MADE A FURTHER PAYMENT OF RS. 52,96,466/- UPTO TILL 31/10/2002 OUT OF THE TOTAL LIABILITY OF RS. 1,73,24,707/- FOR THE YEAR UNDER CONSIDERATION. THEREFORE, THE CONTENTION OF THE ASSESSEE THAT THE DISALLOWANCE SHOULD BE RESTRICTED TO RS. 2,09,110/- IS ACCEPTED. THE ASSESSING OFFICER IS DIRECTED TO MODIFY THE ORDER GIVING EFFECT TO THE CIT(APPEALS) ORDER AS PER THE DISCUSSION MADE ABOVE. 6. BEING AGGRIEVED WITH THE ORDER OF LD. CIT(A), TH E DEPARTMENT IS IN APPEAL BEFORE US AND HAS TAKEN FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETED THE ADDITION OF RS. 1,20,28,241/- MADE BY THE ASSESSING OFFICER U/S 43B OF THE I.T. ACT, 1961 FOR UNPAID LEAVE ENCASHMENT WHILE GIVING EFFECT TO ORDER OF THE LD. CIT(APPEALS) DATED 19.02.2010 AND DIRECTED THE ASSESSING OFFICER TO ITA NO. 1040 & CO NO. 183/D/2012 5 MODIFY THE ORDER GIVING EFFECT TO CIT(APPEALS) TO RESTRICT THE DISALLOWANCE TO RS. 2,09,110/-. 2. THE ORDER OF THE LD. CIT(A) IS PERVERSE IN LAW AND ON THE FACTS. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORD OF THE CASE. 8. THE ASSESSEES CLAIM IS THAT IN THE PROFIT AND L OSS ACCOUNT, IT WAS CLAIMING THE EXPENDITURE IN REGARD TO LEAVE ENCASHM ENT ONLY ON ACTUAL PAYMENT BASIS AND NOT ON THE BASIS PROVISION MADE I N ACCOUNTS. THE SUBMISSION IS THAT TO THE EXTENT PROVISION REMAINED UNPAID, THE SAME WAS ADDED BACK WHILE COMPUTING THE TOTAL INCOME AND, TH EREFORE, AMOUNT APPEARING IN THE PROVISION, ACCOUNT WAS PRIMARILY T AX PAID. THE FINDINGS OF LD. CIT(A) TO THIS EFFECT, AS NOTED EARLIER, HAVE N OT BEEN CONTROVERTED BY THE DEPARTMENT. WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) BECAUSE THE PAYMENT HAS BEEN CLAIMED ON ACTUAL PAYMENT BASIS AND NOT ON THE BASIS OF PROVISION MADE IN ACC OUNTS. WE, ACCORDINGLY, CONFIRM THE ORDER OF LD. CIT(A). 9. IN CROSS OBJECTION NO. 183/D/2012 : AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSESS EE, DID NOT PRESS THE CROSS OBJECTION AND, THEREFORE, THE SAME IS, DISMIS SED AS NOT PRESSED. ITA NO. 1040 & CO NO. 183/D/2012 6 10. IN THE RESULT, DEPARTMENTS APPEAL AS WELL AS C ROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/12/2012 SD/- SD/- (R.P. TOLANI) JUDICIAL MEMBER (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED: 14/12/2012 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER ASSISTANT REGISTRAR