M/s The Orissa State Police Housing & Welfare Corporation, Bhubaneswar V. ACIT, Bhubaneswar

ITA 21/CTK/2010

• Counselvise Citation: 2122114 RSA 2010
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 20-09-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 22-01-2010
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHY
• Assessee Lawyers: D K MOHANTYC R JENA ARS
• Section: 37; 154; 142(1)

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 21/CTK/2010 (ASSESSMENT YEAR 2005 - 06) M/S.THE ORISA STATE POLICE HOUSING & WELFARE CORPORATION LTD., JANPATH, BHUBANESWAR 7 51 022 PAN: AABCT 7853 N. VERSUS ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(2), BHUBANESWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI D.K.MOHANTY/C.R.JENA,ARS FOR THE RESPONDENT SMT. PARAMITA TRIPATHY, DR DATE OF HEARING : 20.09 .2011 DATE OF PRONOUNCEMENT : 23.09.2011 ORDER SHRI K.K.GUPTA, AM : THIS APPEAL BY THE ASSESSE AGITATES THE CONFIRMATION OF DISALLOWANCE OF LEAVE ENCASHMENT AMOUNTING TO 3,82,947 PAID/CLAIMED UNDER THE PROVISIONS OF SECTION 37 OF THE INCOME - TAX ACT,1 961 DISALLOWED BY THE ASSESSING OFFICER WHICH DISALLOWANCE HAS BEEN CONFIRMED BY THE LEARNED CIT(A) RELYING ON THE DECISION OF HONBLE KOLKATA HIGH COURT IN THE CASE OF EXCIDE INDUSTRIES V. UNION OF INDIA (292 ITR 474) WHICH ORDER HAS BEEN GRANTED STAY OF OPERATION BY THE HONBLE SUPREME COURT . 2. THE BRIEF FACTS AS HAVE BEEN BROUGHT ON RECORD ARE THAT THE ASSESSEE DERIVES ITS INCOME FROM DEPOSITORY WORKS . THE ASSESSEE BEING A COMPANY MAINTAINS ITS BOOKS O F ACCOUNTS AS REQUIRED IN THE REGULAR COURSE OF BUS INESS ACTIVITIES AND THE SAME ARE DULY AUDITED BY THE STATUTORY AUDITORS APPOINTED BY THE CAG. THE GROSS RECEIPT OF THE COMPANY EXCEEDING RS.40.00 LAKHS ARE ALSO FURTHER AUDITED BY THE STATUTORY AUDITORS U/S 44AB OF THE I.T ACT, 1961 . ALL THE TRANSACTIONS ARE ROUTED THROUGH BANK ACCOUNT. THE RETURN OF INCOME WAS FILED ON 31. 10.2005 SHOWING INCOME AT 18,25,537 ACCOMPANIED WITH THE P& L ACCOUNT ,BALANCE SHEET, TAX AUDIT REPORT ETC. THE CASE WAS SELECTED FOR SCRUTINY. IN RESPONSE TO NOTICE U/S 143(2) & 142(1) OF THE I.T ACT ,THE ITA NO.21/CTK/2010 2 AUTHORISED REPRESENTATIVE OF THE ASSESSEE COMPAN Y APPEARED BEFORE THE ASSESSING OFFICER ALONG WITH BO OKS OF ACCOUNTS & OTHER DETAILS . HOWEVER , WHILE COMPLETING THE ASSESSMENT , THE ASSESSING OFFICER ADDED AN AMOUNT OF 1,89,73,722 (I.E., 3,82,947 ON ACCOUNT OF UNUTILIZED LEAVE ENCASHMENT AND 1,85,980,7 75 U/S.40(A)(IA)) . AGGRIEVED THE ASSESSEE APPEALED BEFORE THE FIRST APPELLATE AUTHORITY , WHO CONFIRMED THE DISALLOWANCE U/S.40(A)(IA) AMOUNTING TO 1,85,90,775 WHICH WAS RECTIFIED BY THE ASSESSING OFFICER UNDER THE PROVISIONS OF SECTION 154 THEREFORE WAS N OT PRESSED BEFORE THE LEARNED CIT(A). HOWEVER, THE DISALLOWANCE OF THE UNUTILIZED LEAVE ENCASHMENT WAS CONFIRMED AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 3. THIS BEING THE SOLITARY ISSUE, WE HAVE HEARD THE RI VAL CONTENTIONS OF THE PARTIES HERE TO ON THE PREMISE THAT THE HONBLE SUPREME COURT HAS STAYED OPERATION THE DECISION IN THE CASE OF EXCIDE INDUSTRIES V. UNION OF INDIA (292 ITR 474) (KOL) WHO HAD STRUCK DOWN THE PROVISIONS OF SECTION 43B(F) BEING ARBITRARY IN VIEW OF THE APEX COURT DECISION I N THE CASE OF BHARAT EARTH MOVERS V. CIT [2000] 245 ITR 428 . 4. THE LEARNED DR HAS INSISTED THAT THE FACTS OF THE ASSESSEES CASE ARE TO BE CONSIDERED IN THE LIGHT OF THE HONBLE SUPREME COURT STAYING THE PROCEEDINGS WHO HAVE STAYED THE JUDGMENT OF HONBLE KOLKATA HIGH COURT THEREFORE IS TO BE DECIDED AGAINST THE ASSESSEE. 5. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT FACTS AS CONSIDERED BY THE LEARNED CIT(A) AND THE ASSESSING OFFICER INDICATE THAT THE SE FACTS OF THE CASE ARE NOT SIMILAR TO THA T AS WERE TO BE CONSIDERED BY THE HONBLE HIGH COURT FOR DISALLOWANCE OF LEAVE ENCASHMENT REMAINED UNUTILIZED ONLY TO BE CONSIDERED FOR DISALLOWANCE U/S.43B(F) OR U/S.37(1). HE SUBMITTED THAT THE ASSESSING OFFICER HAS CATEGORICALLY POINTED OUT THAT NO AMOU NT HAS BEEN SHOWN AS PAYABLE BY THE ASSESSEE WHEN THE SUM OF 3,83,947 ALONE ITA NO.21/CTK/2010 3 WAS CLAIMED AGAINST AN EARLIER SIMILAR LIABILITY WHICH HAVE BEEN DISALLOWED IN THE EARLIER PRECEDING ASSESSMENT YEAR. THE ACCOUNTING OF SUCH EXPENSES AS ACTUALLY TO BE BORNE BY TH E ASSESSEE ARE CLAIMED THEREFORE COULD NOT BE CONSIDERED U/S.43B(F). PENDING THE FINAL DECISION OF THE HONBLE SUPREME COURT, HE PRAYED THAT A DIRECTION BE MADE TO THE ASSESSING OFFICER TO VERIFY THE FACTS OF THE ASSESSEES CASE IN THE LIGHT OF THE INSERTI ON OF THE AMENDMENT AFTER THE HONBLE SUPREME COURT JUDGMENT IN THE CASE OF BHARAT EARTH MOVERS V. CIT [2000] 245 ITR 428 . 6. WE AGREE TO THE PROPOSITION AS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE IN THE LIGHT OF THE FACT THAT BOTH THE AUTHORITIES BELOW HAVE NOT IDENTIFIED THE FACTUAL ASPECTS RELATING TO THE ISSUE WHETHER COULD BE COVERED FOR DISALLOWANCE U/S.43B(F) WHI CH ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERATION AFRESH AND IF SO DEEMED FIT , TO ALLOW THE CLAIM AS PER THE DECISION OF HONBLE SUPREME COURT AS AND WHEN THE FACTS BROUGHT ON RECORD RELATE TO THE ISSUE WHICH HAS BEEN STAYED BY HO NBLE SUPREME COURT ON THE FACTS OF THE HONBLE KOLKATA HIGH COURT DECISION IN THE CASE OF EXCIDE INDUSTRIES V. UNION OF INDIA (292 ITR 474). 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. SD/ - SD/ - (K.S.S. PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 23 RD SEPTEMBER, 2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. ITA NO.21/CTK/2010 4 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: M/S.THE ORISA STATE POLICE HOUSING & WELFARE CORPORATION LTD., JANPATH, BHUBANESWAR 751 022 2. THE RESPONDENT: ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(2), BHUBANESWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.