FOSECO INDIA LIMITED, PUNE V. DCIT Circle-1(2), PUNE

ITA 1951/PUN/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9786 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 1998-1999
• Appeal Filed On: 10-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARISES OUT OF PASSED
• Keywords: Capital expenditure
• Section: 201; 208; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE VIRTUAL COURT BEFORE SH RI R.S. SYAL, VICE PRESIDENT AND SH RI PARTHA SARATHI CHAUDHURY , J UDICIAL MEMBER I TA NO. 1 95 1 /PUN/201 9 / ASSESSMENT YEAR : 1998 - 1999 FOSECO INDIA LIMITE D, GAT NOS. 922 & 923, SANASWADI, TALUKA SHIRUR, DIST. PUNE 412 208 PAN : AAACF1049H VS. DCIT , CIRCLE 1(2) , PUNE APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : TH IS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) - 13 , PUNE ON 18 - 10 - 2019 IN RELATION TO THE ASSESSMENT YEAR 1998 - 99 . 2. THE ONLY ISSUE RAISED HERE IN IS AGAINST NOT GRANTING DEDUCTION OF RS.2.86 CRO RE TOWARDS PAYMENT ON ACCOUNT OF VOLUNTARY RETIREMENT SCHEME (VRS) RELATING TO EMPLOYEES OF ITS CALCUTTA UNIT. A SSESSEE BY SHRI PRASHANT JAISWAL RE VENUE BY SHRI S.P. WALIMBE DATE OF HEARING 0 3 - 07 - 2020 DATE OF PRONOUNCE MENT 06 - 0 7 - 2020 ITA NO . 1 95 1 /PUN/ 201 9 FOSECO INDIA LIMITED 2 3. SUCCINCTLY, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF FOUNDRY FLUXES, FOUND RY CHEMICALS AND PROFAX. THE A SSESSEE FILED THE RETURN DECLARING TOTAL INCOME AT RS.6,10,08,690/ - . THE ASSESSING OFFICER, IN THE ASSESSMENT COMPLETED U/S.143( 3 ) , DID NOT ALLOW DEDUCTION OF RS.2,86,86,055/ - INCURRED ON PAYMENT OF VRS BY TREATING THE SAME AS A CAPITAL EXPENDITURE. THE LD. F IRST A PPELLATE A UTHORITY COUNTENANCED THE VIEW OF THE ASSESSING OFFICER. AGGRIEVED THEREBY, THE ASSESSEE HAS APPROACHED THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE SIDES THROUGH V IRTUAL COURT AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. IT IS UNDISPUTED THAT THE ASSESSEE PAID THE ABOVE SUM TOWARDS VRS OF CERTAIN EMPLOYEES OF CALCUTTA UNIT. IT IS NOTICED THAT SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE T HE TRIBUNAL IN ASSESSEES OWN CASE FOR THE IMMEDIATELY SUCCEEDI NG ASSESSMENT YEAR. V IDE ORD ER DATED 26 - 03 - 2010 (ITA NO.4667/M/2005) , THE TRIBUNAL HAS DECIDED IT IN FAVOUR OF THE ASSESSEE. THE REVENUE CARRIED THE MATTER BEFORE THE HONBLE BOMBAY HIGH COURT AGAINST THE SAID ORDER OF THE TRIBUNAL . VIDE JUDGMENT DATED 0 8 - 03 - 2013 , THE HONBLE BOMBAY HIGH COURT ITA NO . 1 95 1 /PUN/ 201 9 FOSECO INDIA LIMITED 3 DISMISSED THE APPEAL OF THE REVENUE. A COPY OF THE JUDGMENT IS AVAILABLE ON RECORD. 5. IT IS SEEN THAT SECTION 35DDA HAS BEEN INSERTED BY THE FINANCE ACT, 2001 PROVIDING FOR AMORTIZATION OF EXPENDITURE INCUR RED O N VOLUNTARY RETIREMENT SCHEME. THE ASSESSMENT YEAR UNDER CONSIDERATION IS PRIOR TO THE INSERTION OF SECTION 35DDA AND HENCE CANNOT RULE THE POSITION. THE INSTANT YEAR WOULD BE GOVERNED BY THE EARLIER PROVISIONS. 6. THE LD. DR FAIRLY ADMITTED T HAT THE FACTS AND CIRCUMSTANCES OF THE CASE FOR THE YEAR UNDER CONSIDERATION ARE SIMILAR TO THOSE OF THE ASSESSMENT YEAR 1999 - 2000 , WHICH HAS BEEN CONSIDERED AND DECIDED BY THE HONBLE BOMBAY HIGH COURT. RESPECTFULLY FOLLOWING THE SAME, WE REVERSE THE IMP UGNED ORDER ON THIS SCORE AND DIRECT TO ALLOW THE DEDUCTION IN THE YEAR UNDER CONSIDERATION. 7 . IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE O PEN COURT ON 06 TH JULY , 2020 . SD/ - SD / - ( PARTHA SARATHI CHAUDHURY ) ( R.S.SYAL ) JUDICIAL MEMBER VICE PRESIDENT PUNE ; DATED : 06 TH JULY , 2020 SATISH ITA NO . 1 95 1 /PUN/ 201 9 FOSECO INDIA LIMITED 4 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A) - 13 , PUNE 4. 5. 6 . THE PR.CIT - 1 , PUNE , , / DR A , ITAT, PUNE; / GUARD FILE . / BY ORDER, / / TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 0 3 - 07 - 2020 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 0 3 - 07 - 2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED D RAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPAT CH OF ORDER. *