M/s. S V Ghatalia & Associates LLP, Kolkata V. DCIT, Circle - 22, Kolkata

ITA 169/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2337 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Appeal Filed On: 31-01-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAUL
• Assessee Lawyers: DEBABRATA GHOSH
• Section: 143(3); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.169/KOL/2019 ( / ASSESSMENT YEAR:2016-17) M/S S. V. GHATALIA& ASSOCIATES LLP (A LIMITED LIABILITY PARTNERSHIP WITH LLP IDENTITY NO. AAB- 4293) SUCCESSOR TO M/S S V GHATALIA& ASSOCIATES EFFECTIVE 1 ST APRIL, 2013 22, CAMAC STREET, 3 RD FLOOR, BLOCK-B, KOLKATA 700016 VS. DCIT, CIRCLE-22, KOLKATA ./ ./PAN/GIR NO.: ACHFS 9181 P (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI DEBABRATA GHOSH, FCA RESPONDENT BY :SHRI SUPRIYO PAUL, JCIT / DATE OF HEARING : 27/02/2020 /DATE OF PRONOUNCEMENT : 20/03/2020 / O R D E R PER DR. A.L. SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERT AINING TO ASSESSMENT YEAR 2016-17, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-2, KOLKATA, IN APPEAL NO. CIT(A), KOLKATA- 6/10377/18-19, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASS ESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 02/07/2018. M/S S. V. GHATALIA& ASSOCIATES LLP ITA NO. 169/KOL/2019 ASSESSMENT YEAR:2016-17 P PP PA AA AG GG GE EE E | || | 2 22 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -6 ['CIT(A)' FOR SHORT] HAS ERRED ON FACTS AND IN LAW IN UPHOLDING T HE DISALLOWANCE OF A SUM OF RS. 6,78,020/- BEING THE PROVISION MADE FOR LEAV E ENCASHMENT REVERSED AND CREDITED TO P & L A/C IN THE CURRENT ASSESSMENT YEAR OUT OF PROVISION MADE FOR LEAVE ENCASHMENT IN EARLIER ASSESSMENT YEA RS EVEN THOUGH THE PROVISION WHEN MADE IN EARLIER YEARS WAS NOT ALLOWE D AS A DEDUCTION AND AS A RESULT THE SAME AMOUNT HAS BEEN TAXED TWICE. 2. THE LEARNED CIT(A) HAS ALSO ERRED ON FACTS AND I N LAW IN CONFIRMING THE ADDITION OF RS. 6,78,020/- CONTRARY TO THE EXPR ESSED PROVISIONS OF SECTION 43B(F) OF THE ACT. 3. THE LEARNED CIT(A) HAS ALSO ERRED ON FACTS AND I N LAW IN CONFIRMING THE ADDITION MADE & THUS FAILING TO APPRECIATE THAT TAX HAS ALREADY BEEN PAID ON RS. 6,78,020/- IN THE ASSESSMENT YEAR IN WH ICH PROVISION FOR LEAVE ENCASHMENT WAS MADE. IN NOT DELETING THE ADDITION M ADE THE APPELLANT IS NOT ONLY BEING TAXED TWICE BUT IS ALSO BEING MADE T O PAY TAX ON THE SAME AMOUNT TWICE, ONCE IN THE YEAR IN WHICH PROVISION I S MADE & AGAIN IN THE CURRENT ASSESSMENT YEAR WHEN THE PROVISION MADE HAS BEEN CREDITED IN P & L A/C. THIS IS CONTRARY TO SUPREME COURT ORDER IN T HE CASE OF EXCIDE INDUSTRIES LTD V UOI. 4. THE ORDER OF THE LEARNED CIT(A) TO THE EXTEND IN DICATED ABOVE IS CONTRARY TO THE FACTS, LAW AND THE PRINCIPLES OF NA TURAL JUSTICE. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND /OR MODIFY ANY OF THE GROUNDS OF APPEAL AT OR BEFORE THE HEARING OF THE A PPEAL. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFO RE THE BENCH THAT ASSESSING OFFICER HAS NOT EXAMINED THE PROVISION FOR LEAVE EN CASHMENT CREDITED IN THE PROFIT AND LOSS ACCOUNT AND REIMBURSE IN THE CURRENT YEAR. THE ASSESSEE MADE PROVISION IN EARLIER YEAR WHICH PARTLY HAS REVERSED IN CURRENT Y EAR AND THE SAME ASPECT HAS NOT BEEN EXAMINED AND ADJUDICATED BY THE ASSESSING OFFI CER THEREFORE THE MATTER MAY BE REMITTED BACK TO THE FILE OF ASSESSING OFFICER T O EXAMINE THE PROVISION FOR LEAVE ENCASHMENT. ON THE OTHER HAND, THE LD. D.R. DID NOT HAVE ANY OBJECTION IF THE MATTER IS REMITTED BACK TO THE FILE OF ASSESSING OF FICER. M/S S. V. GHATALIA& ASSOCIATES LLP ITA NO. 169/KOL/2019 ASSESSMENT YEAR:2016-17 P PP PA AA AG GG GE EE E | || | 3 33 3 4. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GO NE THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCU MENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS AVAILABLE ON RECORD. WE NOTE THAT ASSESSEE MADE PROVISION FOR LEAVE ENCASHMENT IN EARLIER YEARS AS WELL AS IN THE CURRENT ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSESSEE ALSO WRITTEN BACK THE EXCESS PROVISION MADE IN EARLIER YEARS AND ASSESSING OFFICER HAS NOT EXAMINED THE SAME. THEREFORE, WE ARE OF THE VIEW THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. LD. D.R. FOR THE REVENUE DID NOT HAVE ANY OBJECTION IF THE MATTER IS REMITTED BACK TO THE FILE OF ASSESSING OFFICER. WE NOTE THAT THE ISSUE INVOLVED IS IN RELATION TO THE LEAVE ENCASHMENT WHICH IS COVERED B Y THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF EXIDE INDUSTRIES LTD. VS. UOI IN APPEAL NO. CC22889/2008(SC). THEREFORE, WE DIRECT THE ASSESSI NG OFFICER TO EXAMINE THE QUANTUM OF PROVISION FOR LEAVE ENCASHMENT OF CURREN T YEAR AND THE PREVIOUS YEAR AND ASCERTAIN THE PROVISION FOR LEAVE ENCASHMENT FO R THE CURRENT YEAR. THEREAFTER THE ASSESSING OFFICER SHOULD PASS ORDER AS PER OUTC OME OF THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF EXIDE INDUSTRI ES LTD. (SPECIAL LEAVE TO APPEAL NOS. CC22889/2008 DATED 8.5.2009 (SC). FOR S TATISTICAL PURPOSES, THE APPEAL OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 20.03.2020 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 20/03/2020 ( SB, SR.PS ) M/S S. V. GHATALIA& ASSOCIATES LLP ITA NO. 169/KOL/2019 ASSESSMENT YEAR:2016-17 P PP PA AA AG GG GE EE E | || | 4 44 4 COPY OF THE ORDER FORWARDED TO: 1. M/S S.V.GHATALIA& ASSOCIATES LLP 2. DCIT, CIRCLE-22, KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATABENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES