M/s Mjunction Services Ltd, Kolkata V. DCIT, Circle-8(1), Kolkata

ITA 1559/KOL/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8447 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 24-02-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 26-06-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHETAN MEHTA; VIVEK RUIA AR AS
• Assessee Lawyers: KOL ASSESSMENT YEARS
• Keywords: TDS; Rule 8D
• Section: 43B; 14A; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA C BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI ABY T. VARKEY, JUDICIAL MEMBER) I.T.A. NOS. 1558 & 1559/KOL/2019 ASSESSMENT YEARS: 2013-14 & 2014-15 MJUNCTION SERVICES LTD...............................................................................APPELLANT [PAN: AACCM 5881 C] VS. DCIT, CIRCLE-8(1), KOLKATA............................................................................................RESPONDENT APPEARANCES BY: SH. CHETAN MEHTA & SH. VIVEK RUIA, A/R, APPEARED ON BEHALF OF THE ASSESSEE. SH. SUPRIYO PAUL, ADDL. CIT, APPEARED ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : FEBRUARY 24 TH , 2021 DATE OF PRONOUNCING THE ORDER : MARCH 24 TH , 2021 ORDER PER J. SUDHAKAR REDDY, AM : BOTH THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST SEPARATE BUT IDENTICAL ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-3, KOLKATA, [HEREINAFTER THE CIT(A)], PASSED U/S. 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DATED 10.04.2019 FOR THE ASSESSMENT YEARS 2013-14 & 2014-15. AS THE ISSUES ARISING IN BOTH THESE APPEALS ARE IDENTICAL, FOR THE SAKE OF CONVENIENCE THEY ARE HEARD TOGETHER AND DISPOSED OFF BY WAY OF THIS COMMON ORDER. 2. WE HAVE HEARD MR. SH. CHETAN MEHTA & MR. VIVEK RUIA ON BEHALF OF THE ASSESSEE AND MR. SUPRIYO PAUL, LD. SR. D/R ON BEHALF OF THE REVENUE. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD AND THE CASE LAW CITED, WE HOLD AS FOLLOWS. 3. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE AO HAS NOT RECORDED PROPER SATISFACTION BEFORE INVOKING RULE 8D OF THE INCOME TAX RULES, 1962 AND HENCE THE DISALLOWANCE MADE U/S 14A OF THE ACT BY APPLYING RULE 8D OF THE INCOME TAX RULES, 1962 IS BAD IN LAW CANNOT BE ACCEPTED FOR THE REASON THAT THE AO IN PARA-2.4 PAGE-4 HAD 2 I.T.A. NOS. 1558 & 1559/KOL/2019 ASSESSMENT YEARS: 2013-14 & 2014-15 MJUNCTION SERVICES LTD. RECORDED HIS SATISFACTION AS REQUIRED BY LAW. THUS THIS ARGUMENT OF THE ASSESSEE STANDS DISMISSED. 3.1. ON THE ISSUE OF QUANTUM OF DISALLOWANCE, WE RESTORE THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION OF IN ACCORDANCE WITH LAW, WITH THE DIRECTION TO APPLY THE PROPOSITIONS OF LAW LAID DOWN BY HONBLE BOMBAY HIGH COURT IN THE CASE OF HDFC BANK LIMITED VS. DCIT (WP NO. 1753 OF 2016) DATED 5 TH FEBRUARY, 2016 (BOMBAY HC) , DCIT VS. SPML INFRA LIMITED (ITA NO. 1698/KOL/2018) AND REI AGRO [(2013) GA 3022 OF 2013; ITAT 161 OF 2013 (CAL HC)] AND DETERMINE THE QUESTION OF DISALLOWANCE U/S 14A OF THE ACT. 3.2. THE ASSESSEE IS DIRECTED TO COOPERATE WITH THE AO IN COMPLETION OF THE ASSESSMENT IN ACCORDANCE WITH LAW. IN THE RESULT, THIS GROUND OF THE ASSESSEE IS ALLOWED IN PART. 4. THE SECOND GROUND OF THE ASSESSEE IS ON THE DISALLOWANCE OF PROVISIONS FOR LEAVE ENCASHMENT. THE HONBLE SUPREME COURT IN THE CASE OF EXIDE INDUSTRIES LTD. [(2020) 116 TAXMANN.COM 378 (SC)] ORDER DATED 24 TH APRIL, 2020 HELD THAT THE PROVISIONS OF SECTION 43B OF THE ACT TO PROVISION MADE FOR LEAVE ENCASHMENT. THUS WE DISMISS THIS GROUND OF THE ASSESSEE. 4.1. THE ASSESSEE REQUESTS THE TRIBUNAL THAT NECESSARY DIRECTIONS BE GIVEN TO THE AO TO GRANT DEDUCTION OF LEAVE ENCASHMENT ON ACTUAL PAYMENT BASIS. THE AO IS DIRECTED TO CONSIDER THIS CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW FOR THIS YEAR. IN THE RESULT, THIS GROUND OF THE ASSESSEE IS ALLOWED IN PART. 5. GROUND NO. 3 IS ON THE ISSUE OF TDS CREDIT. THIS GROUND IS DISMISSED AS NOT PRESSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED IN PART. KOLKATA, THE 24 TH MARCH, 2021. SD/- SD/- [ABY T. VARKEY] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 24.03.2021 BIDHAN (P.S.) 3 I.T.A. NOS. 1558 & 1559/KOL/2019 ASSESSMENT YEARS: 2013-14 & 2014-15 MJUNCTION SERVICES LTD. COPY OF THE ORDER FORWARDED TO: 1. MJUNCTION SERVICES LTD., GODREJ WATERSIDE TOWER 1, 3 RD FLOOR, PLOT NO. 5, DP BLOCK, SECTOR V, SALTLAKE, KOLKATA-700 091. 2. DCIT, CIRCLE-8(1), KOLKATA. 3. CIT(A)-3, KOLKATA. (SENT THROUGH MAIL) 4. CIT- 5. CIT(DR), KOLKATA BENCHES, KOLKATA. (SENT THROUGH MAIL) TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES