DCIT, CHENNAI V. Metropolitan Transport Corporation (Chennai) Ltd., CHENNAI

ITA 1170/CHNY/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4526 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2013
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 27-05-2013
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM
• Assessee Lawyers: K SANTHANAKRISHNAN
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER] I.T.A. NO. 1170/MDS/2013 ASSESSMENT YEAR : 2006-07 DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE IV(2)(I/C), AAYAKAR BHAVAN, MAIN BUILDING, IV FLOOR, 121, M.G. ROAD, NUNGAMBAKKAM, CHENNAI 600 034. VS M/S. METROPOLITAN TRANSPORT CORPORATION (CHENNAI) LTD., PALLAVAN HOUSE, ANNA SALAI, CHENNAI 600 002. [PAN: AAACP 1935 C] (APPELLANT) (RE SPONDENT) REVENUE BY : SHRI GURU BHASHYAM, JCIT ASSESSEE BY : SHRI K. SANTHANAKRISHNAN, C.A., DATE OF HEARING : 07-08-2013 DATE OF PRONOUNCEMENT : 07-08-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-V, CHEN NAI DATED 25-02-2013 RELEVANT TO THE ASSESSMENT YEAR (AY) 200 6-07. I.T.A. NO. 1170/MDS/2013 2 2. THE ASSESSEE IS A PUBLIC SECTOR TRANSPORT UNDERT AKING. THE ASSESSEE FILED RETURN OF INCOME FOR THE AY. 2006-07 ON 28-11-2006 DECLARING A LOSS OF ` 1,02,77,76,051/-. THE ASSESSMENT IN THE CASE WAS COMPLETED U/S. 143(3) OF THE INCOME TAX ACT, 19 61 (HEREIN AFTER REFERRED TO AS THE ACT) ON 04-12-2008 DETE RMINING THE INCOME OF THE ASSESSEE AS NIL. THE CASE OF THE ASS ESSEE WAS RE-OPENED U/S. 147 OF THE ACT AND NOTICE U/S. 148 W AS ISSUED TO THE ASSESSEE ON 07-01-2010 . THE RE-ASSESSMENT PRO CEEDINGS WERE INITIATED INTER-ALIA ON ACCOUNT OF PROVISION F OR WAGE ARREARS AMOUNTING TO ` 5.80 CRORES MADE BY THE ASSESSEE. THE ASSESSING OFFICER VIDE ORDER DATED 20-12-2010 PASSED U/S. 143 (3) R.W.S. 147 OF THE ACT, DIS-ALLOWED THE PROVISION FOR WAGE ARRE ARS AND BELATED PAYMENTS TOWARDS EMPLOYEES PENSION FUND. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSESS EE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS). THE C IT(APPEALS) OBSERVED THAT THE PROVISION FOR WAGE ARREARS WAS MA DE AS PER WAGE SETTLEMENT, THEREFORE, IT IS AN ASCERTAINED LI ABILITY. THE CIT(APPEALS) DIRECTED THE ASSESSING OFFICER TO ALLO W THE SAME AFTER VERIFICATION. NOW, THE REVENUE HAS COME IN A PPEAL AGAINST THE ORDER OF THE CIT(APPEALS). I.T.A. NO. 1170/MDS/2013 3 3. SHRI GURU BHASHYAM, JCIT APPEARING ON BEHALF OF THE REVENUE REITERATED THE GROUNDS OF APPEAL AND PRAYED FOR SETTING ASIDE THE ORDER OF THE CIT(APPEALS) ON THE ISSUE. THE LD. DR STRONGLY SUPPORTED THE FINDINGS OF THE ASSESSING OF FICER. 4. ON THE OTHER HAND, SHRI K. SANTHANAKRISHNAN, C.A ., APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE PROVISION FOR WAGE ARREARS WAS MADE IN VIEW OF THE WAGE SETTL EMENT AGREEMENT BETWEEN THE ASSESSEE AND THE TRADE UNION S. THE LD. AR STRONGLY SUPPORTED THE FINDINGS OF THE CIT(APPEA LS) AND PRAYED FOR THE DISMISSAL OF THE APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ONLY ISSUE RAISED IN AP PEAL RELATES TO PROVISION OF WAGE ARREARS AMOUNTING TO ` 5.80 CRORES ALLOWED BY THE CIT(APPEALS). WE ARE OF THE CONSIDERED OPINION THAT THE PROVISION HAS BEEN MADE IN VIEW OF THE WAGE SETTLEM ENT AGREEMENT BETWEEN THE ASSESSEE AND THE TRADE UNIONS BEFORE THE JOINT LABOUR COMMISSIONER (RE-CONCILIATION), CHENNA I ON 31-08- 2005. THE PROVISION HAS BEEN CREATED AGAINST THE A SCERTAINED LIABILITY. THE CIT(APPEALS) HAS REMITTED THE ISSUE BACK TO THE I.T.A. NO. 1170/MDS/2013 4 ASSESSING OFFICER WITH A DIRECTION TO ALLOW THE SAM E AFTER VERIFICATION. WE DO NOT FIND ANY INFIRMITY WITH TH E FINDINGS OF THE CIT(APPEALS). THE APPEAL OF THE REVENUE IS DISMISS ED BEING DEVOID OF MERIT. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON WEDNESDAY, THE 7 TH AUGUST, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VI KAS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 7 TH AUGUST, 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR