ACIT, CHENNAI V. Flowserve Sanmar Ltd., CHENNAI

ITA 1735/CHNY/2015

• Counselvise Citation: 173521714 RSA 2015
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 31-07-2015
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNANJCIT
• Section: 147; 263; 63

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , ! , '. ! $ , % & BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.1735 /MDS./2015 ( / ASSESSMENT YEAR :2005-06) THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE 2(1), CHENNAI 600 034. VS. M/S.FLOWSERVE SANMAR LTD., 9,CATHEDRAL ROAD, CHENNAI 600 086. PAN AAACD 2238 A ( '( / APPELLANT ) ( )*'( / RESPONDENT ) / APPELLANT BY : MR.P.RADHAKRISHNAN,JCIT, D.R / RESPONDENT BY : MR.SAROJ KUMAR PARIDA, ADVOCATE / DATE OF HEARING : 07.10.2015 /DATE OF PRONOUNCEMENT : 27.11.2015 + / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (A)-6, CHENNAI DATED 18 .02.2015 IN ITA NO.1735 /MDS/2015 2 ITA NO.129/CIT(A)-6/2013-14 PASSED UNDER SEC.143(3 ) READ WITH SECTION263 & SEC. 250 OF THE ACT. 2. THE REVENUE HAS RAISED THREE GROUNDS IN ITS APP EAL, HOWEVER, THE CRUX OF THE ISSUE IS THAT THE LD. CIT (A) HAS E RRED IN ALLOWING THE CLAIM OF THE DEDUCTION U/S.43B OF THE ACT FOR GRATU ITY AMOUNTING TO ` 88,41,156/- PROVIDED IN THE ACCOUNTS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A COMPANY, ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE O F MECHANICAL SEALS, FILED ITS RETURN OF INCOME FOR THE ASSESSMEN T YEAR 2005-06 AND THE ASSESSMENT WAS COMPLETED U/S.143(3) RWS 147 OF THE ACT ON 28.10.2010. SUBSEQUENTLY, THE COMMISSIONER OF INCOM E TAX I CHENNAI VIDE HIS ORDER U/S.263 OF THE ACT DATED 18. 03.2013 HAD DIRECTED THE LD.A.O TO DISALLOW THE PROVISION FOR G RATUITY U/S.43B OF THE ACT. AGGRIEVED WITH THE ORDER OF THE LD. CIT, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE ITAT. THE TRIBUNAL VIDE ITS ORDER DATED 30.12.2013 IN ITA NO.949/MDS./2013 SET ASIDE THE ORDER OF THE LD.CIT U/S. 263 DATED 18.03.2013 AND DECIDED THE CA SE IN FAVOUR OF ITA NO.1735 /MDS/2015 3 THE ASSESSEE. MEANWHILE THE LD. A.O VIDE HIS ORDER DATED 06.12.2013 GAVE EFFECT TO THE ORDER OF THE LD.CIT U /S.263 DATED 18.03.2013. SUBSEQUENTLY, THE ASSESSEE FILED AN AP PEAL BEFORE THE LD.CIT(A) ON 06.12.2013 AND THE LD. CIT(A) VIDE HI S ORDER DATED 18.02.2015 FOLLOWED THE DECISION OF THE TRIBUNAL DA TED 30.12.2013 AND ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE LD.CIT(A) DATED 18.02.2015, THE REVENUE IS IN N OW ON APPEAL BEFORE US. 4. AT THE OUTSET, LD. A.R. SUBMITTED BEFORE US THA T THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2005-06 DEC IDED THE CASE IN FAVOUR OF THE ASSESSEE AND THE LD.CIT(A) FOLLOWE D THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ORDER DATE D 30.12.2013. IT WAS THEREFORE ARGUED THAT THE ORDER OF THE LD.CIT(A ) DATED 18.02.2015 MAY BE SUSTAINED. THE LD. D.R COULD NOT CONTROVERT TO THE SUBMISSIONS OF THE LD. A.R., HOWEVER HE SUBMITT ED THAT THE LD. ASSESSING OFFICER HAD ARRIVED AT THIS DECISION OUT OF ABUNDANT CAUTION, BECAUSE THE REVENUE HAS CARRIED THE MATTER BEFORE THE ITA NO.1735 /MDS/2015 4 HONBLE MADRAS HIGH COURT IN SR NO.44602 OF 2014 AN D THE MATTER WAS PENDING. 5. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY P ERUSED THE MATERIALS AVAILABLE ON RECORD AND THE DECISION OF T HE TRIBUNAL DATED 30.12.2013 IN THE ASSESSEES OWN CASE FOR THE RELEV ANT ASSESSMENT YEAR 2005-06 AGAINST THE ORDER OF THE LD.CIT U/S. 2 63 OF THE ACT DATED 18.03.2013. IT IS APPARENT THAT THE TRIBUNAL IN ITS ORDER 30.12.2013 FOR THE ASSESSMENT YEAR 2005-06 HAD SET ASIDE THE ORDER OF THE LD.CIT U/S.263 OF THE ACT DATED 18.03.2013 A ND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. SUBSEQUENTLY, THE LD.CIT(A) VIDE HIS ORDER DATED 18.02.2015 FOLLOWED THE DECISION OF THI S TRIBUNAL DATED 30.12.2013 IN ASSESSEES OWN CASE FOR THE RELEVANT ASSESSMENT YEAR 2005-06 AND QUASHED THE ORDER OF THE LD.A.O GIVING EFFECT TO THE ORDER OF THE LD.CIT U/S. 263 OF THE ACT DATED 18.03 .2013 WHICH IS APPROPRIATED. THEREFORE, WE DO NOT FIND IT NECESSAR Y TO INTERFERE WITH THE ORDER OF THE LD. CIT (A) DATED 18.02.2015 FOR T HE RELEVANT ASSESSMENT YEAR 2005-06. ACCORDINGLY THE APPEAL OF THE REVENUE IS DECIDED AGAINST IT. ITA NO.1735 /MDS/2015 5 6. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED ON 27 TH NOVEMBER, 2015 AT CHENNAI. SD/- SD/- ( ! . ' ) (G.PAVAN KUMAR) ( . ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 27 TH NOVEMBER, 2015 . K S SUNDARAM. #$%% &'%(' /COPY TO: % 1. /APPELLANT 2. /RESPONDENT 3. % )%*+ /CIT(A) 4. % ) /CIT 5. ',-% . /DR 6. -/%0 /GF