M/s E & E Ltd., Kolkata V. CIT - 4, KOLKATA, Kolkata

ITA 1299/KOL/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4544 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 14-09-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 14-10-2015
• Court: TRIBUNAL
• Assessee Lawyers: SRIKUMAR BANERJEE FCA LD
• Keywords: Assessment record
• Section: 143(3); 142(1); 263; 63

Judgement Text

ITA NO. 1299/KOL/15 M/S. C & E LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO.1299/KOL/2015 A.Y: 2010-11 M/S. C & E LIMITED VS. C.I.T.-4, KOLKATA PAN: AACCC 5418K (APPELLANT) (RESPONDENT) APPEARANCES BY: SHRI SRIKUMAR BANERJEE, FCA, LD.AR FOR THE ASS ESSEE SHRI RAJAT SUBHRA BISWAS, CIT, LD.SR DR FOR THE REVENUE DATE OF CONCLUDING THE HEARING : 14-09- 2016 DATE OF PRONOUNCING THE ORDER : 16-09-2016 O R D E R SHRI S.S. VISWANETHRA RAVI, JM :- THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER D ATED 20-03-2015 PASSED BY THE COMMISSIONER OF INCOME TAX , KOLKATA-4, KOLKATA FOR THE ASSESSMENT YEAR 2010-11. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRED IN LAW AND IN FACT BY DISALLOWING THE LEAVE S ALARY OF RS.3,35,269 ON THE GROUND THAT IS A PROVISION THOUGH IT IS AN ASCERTAINED LIABILITIES. 2. THAT THE LEARNED COMMISSION OF INCOME TAX HAS ERRED IN LAW AND IN FACT BY DISALLOWING THE LEAVE S ALARY ITA NO. 1299/KOL/15 M/S. C & E LIMITED 2 OF RS.3,35,269 THOUGH IT IS AN ASCERTAINED LIABILIT IES BASED ON ACTUARIAL VALUATION. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRED IN LAW AND IN FACT BY DISALLOWING THE LEAVE S ALARY OF RS.3,35,269 ON THE GROUND THAT IT A PROVISION THOUGH IT IS AN ASCERTAINED LIABILITIES ACCRUED ON MERCANTILE SYSTEM OF ACCOUNTS FOLLOWED BY THE APPELLANT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY HAVING ENGAGED IN THE BUSINESS OF MANUFACTURING OF LEATHER CHEMICALS AND TRADING OF DYES AND CHEMICALS. THE AS SESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,82,33,290/- ON 03-10-2010. THEREAFTER, THE ASSESSEE FILED REVI SED RETURN OF INCOME ON 18-06-2011, WHEREIN THE CLAIM OF CREDIT U NDER MAT WAS INCREASED. UNDER SCRUTINY NOTICES U/S. 143(2) A ND 142(1) WERE ISSUED. IN RESPONSE TO WHICH, THE A/R OF THE A SSESSEE APPEARED AND PRODUCED THE RELEVANT DETAILS BEFORE T HE AO. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THE AO PASSED AN ASSESSMENT ORDER U/S. 143(3) OF THE ACT DATED 21-03 -2013 DETERMINING THE TOTAL INCOME AT RS.2,07,01,302/- FO R THE YEAR UNDER CONSIDERATION. 4. THEREAFTER, THE CIT HAVING EXERCISING HIS JURISD ICTION U/S. 263 ON PERUSAL OF THE ASSESSMENT RECORDS FOUND FRO M SCHEDULE 21.2(XII) (DETAILS OF PROVISION) APPENDED TO THE P & L ACCOUNT THAT A PROVISION FOR LEAVE SALARY TO THE EXTENT OF RS.3,35,269/- WAS MADE FOUND LYING UNPAID IN THE BALANCE SHEET AS ON 31-03- 2010. UNDER SHOW CAUSE NOTICE, THE ASSESSEE FILED W RITTEN SUBMISSION IN RESPECT OF LEAVE SALARY TO THE EXTENT OF RS.3,35,269/- STATING THAT IT WAS NOT A PROVISION. IT WAS AN ACTUARIAL LIABILITY, WHICH WILL BE ASCERTAINED AS P ER ACTUARIAL VALUATION OF LEAVE ENCASHMENT AS PER REVISE INDIAN ACCOUNTING ITA NO. 1299/KOL/15 M/S. C & E LIMITED 3 STANDAR-15. THE LEAVE SALARY IS PAYABLE TO THE EMPL OYEE EVERY YEAR AND SUCH AMOUNT WILL BE PAID ASCERTAINING THE AMOUNT OF LEAVE SALARY. CONSIDERING THE SUBMISSIONS OF THE AS SESSEE THE CIT HAS SET ASIDE THE IMPUGNED ASSESSMENT ORDER DAT ED 21-03- 2013 PASSED U/S. 143(3) OF THE ACT BY TREATING THE SAME AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE AND DIRECTED THE AO TO ADD THE UNPAID LEAVE SALARY TO T HE TOTAL INCOME OF THE ASSESSEE AND TO PASS AN ORDER ACCORDI NGLY. 5. AGGRIEVED BY SUCH ORDER PASSED BY THE CIT U/S. 2 63 NOW THE ASSESEE IS IN APPEAL BEFORE US BY RAISING THE ABOVE MENTIONED GROUNDS OF APPEAL AND FURTHER CONTENDED THAT SUCH CLAIM WAS MADE IN PURS UANT TO THE ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT OF CALCUTTA. BUT, HOWEVER, THE AO DISALLOWED THE SAME IN VIEW OF A SLP (SPECIAL LEAVE PETITION) (CIVIL) PREFERRED BY THE REVENUE BEFORE THE HONBLE SUPREME COURT AGAINST TH E ORDER/JUDGMENT OF THE HONBLE JURISDICTIONAL CALCUTTA HIGH COURT, WHICH W AS STILL PENDING FOR DISPOSAL OF THE SAME. FINALLY THE LD.AR HAS SOUGHT TO REMAND THE ISSUE TO THE FILE OF THE AO IN VIEW OF ORDER DATED 8-5-2009. 6. THE LD. DR CONCEDES THAT THE ORDER/JUDGMENT OF THE HONBLE SUPREME IS BINDING ON THE RESPONDENT-REVENUE. HE ALSO SOUGH T TO REMAND THE ISSUE TO THE FILE OF THE AO. 7. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERI AL EVIDENCE AVAILABLE ON RECORD. WE FIND THAT THE RESPONDENT REVENUE HAD PRE FERRED SLP (SPECIAL LEAVE PETITION) (CIVIL) PETITION BEFORE THE HONBLE SUPREME COURT AGAINST THE JUDGMENT OF THE HONBLE JURISDICTIONAL CALCUTTA HIG H COURT. THE HONBLE APEX COURT IN SLP PROCEEDINGS IN CC 12060/2008 DATED 8.9 .2008 HAD HELD AS UNDER:- THE PETITION WAS CALLED ON FOR HEARING TODAY. UPON HEARING COUNSEL THE COURT MADE THE FOLLOWING O RDER. ITA NO. 1299/KOL/15 M/S. C & E LIMITED 4 ISSUE NOTICE. IN THE MEANTIME, THERE SHALL BE STAY OF THE IMPUGNE D JUDGEMENT, UNTIL FURTHER ORDERS. LATER THE HONBLE SUPREME COURT IN CC 22889 / 2008 DATED 8.5.2009 HAD HELD AS UNDER:- THE PETITION WAS CALLED ON FOR HEARING TODAY. UPON HEARING COUNSEL THE COURT MADE THE FOLLOWING O RDER DELAY CONDONED. LEAVE GRANTED. PENDING HEARING AND FINAL DISPOSAL OF THE CIVIL APP EAL, DEPARTMENT IS RESTRAINED FROM RECOVERING PENALTY AND INTEREST WHI CH HAS ACCRUED TILL DATE. IT IS MADE CLEAR THAT AS FAR AS THE OUTSTANDING INT EREST DEMAND AS OF DATE IS CONCERNED, IT WOULD BE OPEN TO THE DEPARTMENT TO RE COVER THAT AMOUNT IN CASE CIVIL APPEAL OF THE DEPARTMENT IS ALLOWED. WE FURTHER MAKE IT CLEAR THAT THE ASSESSEE WOULD, D URING THE PENDENCY OF THIS CIVIL APPEAL , PAY TAX AS IF SECTION 43B(F) IS ON THE STATUTE BOOK BUT AT THE SAME TIME IT WOULD BE ENTITLED TO MAKE A CLAIM IN ITS RETURNS. 8. IN VIEW OF THE ABOVE, WE REMIT THE ISSUE TO THE FILE OF THE AO TO DECIDE THE SAME TAKING INTO CONSIDERATION THE OUTCOME OF T HE MAIN CASE IN SLP (CIVIL) 22889/2008 OF THE HONBLE SUPREME COURT. TH EREFORE, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH SEPTEMBER 2016. SD/- SD/- P.M. JAGTAP S .S.VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16 /09/2016 ITA NO. 1299/KOL/15 M/S. C & E LIMITED 5 1. THE APPELLANT/ ASSESSEE: M/S. C & E LTD 95 PARK STREET, 2 ND FLOOR, KOLKATA-16. 2 . THE RESPONDENT/ DEPARTMENT : THE COMMISSIONER OF INCOME TAX - 4, KOLKATA, AAYKAR BHAVAN, P-7 CHOWRINGHEE SQUARE, KOL KATA-69. 3. CIT 4. CIT(A) 5. THE DEPARTMENTAL REPRESENTATIVE 6. GUARD FILE TRUE COPY B Y ORDER ASSISTANT REGIS TRAR ** PRADIP SPS INCOME TAX APPELLATE TRIBUNAL KOLKAT A BENCHES, KOLKATA COPY OF THE ORDER FORWARDED TO:-