Exide Industries Ltd., Kolkata V. Addl. CIT, Range-1, Kolkata, Kolkata

ITA 1507/KOL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4789 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 18-05-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 18-10-2012
• Court: TRIBUNAL
• Assessee Lawyers: BISHAN KR SEAL ACAS
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA [BEFORE SHRI N. V. VASUDEVAN, JM & SHRI M. BALAGAN ESH, AM] I.T.A NO.1507/KOL/2012 ASSESSMENT YEAR: 2006-07 EXIDE INDUSTRIES LTD. VS. ADDL. COMMISSIONER OF INCOME-TAX, (PAN: AAACE6641E) RANGE-1, KOLKATA. ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 18.05.2016 DATE OF PRONOUNCEMENT: 20.05.2016 FOR THE APPELLANT: S/ SHRI ANUP SINHA & BISHAN KR. SEAL, ACAS FOR THE RESPONDENT: SHRI SALLONG YADEN, ADDL. CI T, SR. DR ORDER PER SHRI M. BALAGANESH, AM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-I, KOLKATA VIDE APPEAL NO. 267/CIT(A)-I/C-1/10-11 DATED 03.08.2012. ASSESS MENT WAS FRAMED BY DCIT, CIRCLE-1, KOLKATA U/S. 143(3) OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2006-07 VIDE HIS ORDER DATED 22.12.20 09. 2. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL OF ASSESSEE IS AS REGARDS TO DISALLOWANCE CONFIRMED BY CIT(A) MADE U/S. 43B(F) O F THE ACT IN RESPECT OF LEAVE ENCASHMENT OF RS.1,07,29,182/-. 3. AT THE OUTSET, IT IS NOTICED THAT THE ASSESSEE HAS CLAIMED RS.1,07,29,182/-FOR AY 2006-07 ON ACCOUNT PROVISION FOR LEAVE ENCASHMENT O N ACCRUAL BASIS. LD. COUNSEL FOR THE ASSESSEE STATED THAT THE DEDUCTION ON ACCOUNT OF PR OVISION OF LEAVE ENCASHMENT WAS MADE ON THE BASIS OF THE JUDGMENT OF HON'BLE JURISD ICTIONAL HIGH COURT IN THE CASE OF EXIDE INDUSTRIES LTD. VS. UNION OF INDIA (2007) 292 ITR 470 (CAL) BUT HE FAIRLY CONCEDED THAT SUBSEQUENTLY HON'BLE SUPREME COURT HA S STAYED THIS JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT VIDE ORDER 08-05-2009 BY FOLLOWING OBSERVATIONS:- PENDING HEARING AND FINAL DISPOSAL OF THE CIVIL AP PEALS, DEPARTMENT IS RESTRAINED FROM RECOVERING PENALTY AND INTEREST WHICH HAS ACCRUED T ILL DATE. IT IS MADE CLEAR THAT AS FAR AS THE OUTSTANDING INTEREST DEMAND AS OF DATE IS CONCE RNED, IT WOULD BE OPEN TO THE DEPARTMENT TO RECOVER THAT AMOUNT IN CASE CIVIL APP EAL 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 STATUE BOOK BUT AT THE SAME TIME IT WOULD BE ENTITLED TO MAKE A CLAIM IN ITS RETURNS. 2 ITA NO.1507/K/2012 EXIDE INDUSTRIES LTD. AY 2006-07 IN VIEW OF THE ABOVE, LD. COUNSEL FOR THE ASSESSEE FAIRLY STATED THAT LET HON'BLE SUPREME COURT DECIDE THE ISSUE AND BY THAT TIME THE MATTER CAN BE REMITTED BACK TO THE FILE OF AO FOR FRESH ADJUDICATION IN TERM OF THE DECISION OF H ON'BLE SUPREME COURT. ON THIS, LD. CIT DR HAS NOT OBJECTED TO THE SAME. ACCORDINGLY, WE SET ASIDE THIS ISSUE TO THE FILE OF THE AO TO AWAIT THE DECISION OF HON'BLE SUPREME COU RT AND DECIDE THE ISSUE ACCORDINGLY. THIS ISSUE OF ASSESSEES APPEAL IS REM ITTED BACK TO THE FILE OF AO AND ALLOWED FOR STATISTICAL PURPOSES. 4. THE NEXT ISSUE OF ASSESSEES APPEAL IS AS REGARD S TO THE DISALLOWANCE OF EXPENDITURE RESTRICTED TOWARDS EARNING OF EXEMPTED INCOME FROM 2% TO 1% U/S. 14A OF THE ACT. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO. 2: 2(A) THAT THE LD. CIT(A) ERRED IN FACTS AS WELL A S IN LAW BY RESTRICTING THE DISALLOWANCE TOWARDS EARNING OF EXEMPTED INCOME FROM 2% TO 1% BY FOLLOWING THE DECISIONS OF THE JURISDICTIONAL TRIBUNAL, WHEN THE MUMBAI HIGH COURT HAD CATEGORICALLY HELD THAT THE ACTUAL EXPENSES INCURRED FOR EARNING EXEMPTED INCOM E WOULD ONLY BECOMING WITHIN THE AMBIT OF SECTION 14A. B) THAT THE LD. CIT(A) ERRED IN FACTS AS WELL AS I N LAW IN IGNORING THE FACT THAT THE APPELLANT ASSESSEE HAD QUANTIFIED A SUM OF RS.1,23, 469/- AS ACTUAL EXPENDITURE INCURRED ON EARNING EXEMPTED INCOME, WHICH WAS DULY VERIFIED THE TAX AUDITORS, THEREBY CONFIRMING THE DISALLOWANCE TO AN AD HOC 1% OF THE EXEMPTED INCOME. 5. AT THE TIME OF HEARING LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT HE HAS INSTRUCTIONS NOT TO PRESS THIS GROUND OF APPEAL. S INCE LD. CIT, DR HAS NOT RAISED ANY OBJECTION, WE DISMISS THIS GROUND OF APPEAL OF ASSE SSEE AS NOT PRESSED. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 7. ORDER IS PRONOUNCED IN THE OPEN COURT ON 20.05.2 016 SD/- SD/- (N. V. VASUDEVAN) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED : 20TH MAY, 2016 JD.(SR.P.S.) 3 ITA NO.1507/K/2012 EXIDE INDUSTRIES LTD. AY 2006-07 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT EXIDE INDUSTRIES LTD., 59E, CHOWRINGHEE ROAD, KOLKATEA-700 020 2 RESPONDENT ADDL. CIT, RANGE-1, KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .