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

ITA 2359/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2768 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 14-11-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RADHEY SHYAM
• Section: 143(3); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENC H KOLKATA BEFORE SHRI A.T. VARKEY, JM &DR. A.L.SAINI, AM ./ITA NOS.2358 & 2359/KOL/2018 ( / ASSESSMENT YEARS: 2014-15 & 2015-16) M/S S.V. GHATALIA & ASSOCIATES LLP 22, CAMAC STREET, 3 RD FLOOR, BLOCK B, KOLKATA, WEST BENGAL VS. DCIT, CIRCLE-22, KOLKATA ./ ./PAN/GIR NO.: ACHFS 9181 P (ASSESSEE) .. (REVENUE) ASSESSEE BY : NONE RESPONDENT BY : SHRI RADHEY SHYAM, CIT DR / DATE OF HEARING : 23/04/2019 /DATE OF PRONOUNCEMENT : 12/06/2019 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED TWO APPEALS FILED BY THE ASSESSEE , PERTAINING TO ASSESSMENT YEARS 2014-15 & 2015-16 RESPECTIVELY, ARE DIRECTED AGAINST THE ORDERS PASSED BY THE COMMISSIONER OF INCOME TAX (APPEAL)-6, KOLKATA, WHICH IN TURN ARISES OUT OF ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/ S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 28.11.2016 . 2. SINCE, THE ISSUES INVOLVED IN THESE TWO APPEALS ARE COMMON AND IDENTICAL; THEREFORE, THESE APPEALS HAVE BEEN HEARD TOGETHER A ND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER. FOR THE SAKE OF CONVENIENCE, TH E GROUNDS AS WELL AS THE FACTS M/S S.V. GHATALIA & ASSOCIATES LLP ITA NOS.2358 & 2359/KOL/2018 ASSESSMENT YEARS:2014-15& 2015-16 P PP PA AA AG GG GE EE E | || | 2 22 2 NARRATED IN ITA NO.2358/KOL/2018, FOR ASSESSMENT YE AR 2014-15, HAVE BEEN TAKEN INTO CONSIDERATION FOR DECIDING THE ABOVE APPEALS EN MASSE . 3. 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 THE DISA LLOWANCE OF A SUM OF RS. 41,08,905/- BEING THE PROVISION MADE FOR LEAVE ENCA SHMENT IN THE CURRENT ASSESSMENT YEAR ON THE BASIS OF ACTUARIAL VALUATION . 2. THE ORDER OF THE LEARNED CIT(A) TO THE EXTEND IN DICATED ABOVE IS CONTRARY TO THE FACTS, LAW AND THE PRINCIPLES OF NATURAL JUS TICE. 3. 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. 4. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F ASSESSEE IN SPITE OF ISSUANCE OF NOTICE FOR HEARING MORE THAN ONE OCCASION AND LD . DEPARTMENTAL REPRESENTATIVE (DR), WAS PRESENT FOR THE APPELLANT REVENUE. IN THE ABSENCE OF ANY APPEARANCE BY THE ASSESSEE, THE APPEAL IS BEING DISPOSED OF EX PARTE QUA THE ASSESSEE, AFTER HEARING LD. DR FOR THE REVENUE ON MERITS IN TERMS O F RULE 24 OF THE INCOME TAX APPELLATE, TRIBUNAL, RULES, 1963. 5. AFTER HEARING THE LD. DR FOR THE REVENUE, WE NOT E THAT THE ASSESSEE HAD CLAIMED A SUM OF RS. 41.08,905/- ON ACCOUNT OF PROVISION OF LEAVE ENCASHMENT AS ALLOWABLE REVENUE EXPENSES IN THE LIGHT OF DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF EXIDE INDUSTRIES LTD. VS. UNIO N OF INDIA 292 ITR 470. AS IN EARLIER YEARS THIS FACT WAS DULY DISCLOSED IN THE A NNEXURE 7 OF TAX AUDIT REPORT BY WAY OF NOTE WHICH READS AS UNDER: THE FIRM IS OF OPINION THAT LEAVE ENCASHMENT LIAB ILITY TO THE EMPLOYEES IS NOT SUBJECT TO PROVISIONS OF SECTION 43B(F) OF THE INCO ME TAX ACT, 1961. IN THIS REGARD, IT HAS PLACED RELIANCE ON THE DECISION OF T HE CALCUTTA HIGH COURT IN THE CASE OF EXIDE INDUSTRIES LTD. VS. UNION OF INDIA, W HICH IS BINDING IN THE TERRITORIAL JURISDICTION OF THE CALCUTTA HIGH COURT . HOWEVER, THE DEPARTMENT HAS PREFERRED AN APPEAL BEFORE HONBLE SUPREME COURT. F URTHER, THE DEPARTMENT HAS DISALLOWED AMOUNT CLAIMED IN EARLIER ASSESSMENT YEA RS IN THE ASSESSMENT ORDER. THE AMOUNTS DISALLOWED IN EARLIER YEARS HAVE BEEN R EPORTED ABOVE. M/S S.V. GHATALIA & ASSOCIATES LLP ITA NOS.2358 & 2359/KOL/2018 ASSESSMENT YEARS:2014-15& 2015-16 P PP PA AA AG GG GE EE E | || | 3 33 3 WE NOTE THAT THE DEPARTMENT HAS GONE INTO APPEAL BE FORE THE HONBLE SUPREME COURT AGAINST DECISION OF CALCUTTA HIGH COURT IN TH E CASE OF EXIDE INDUSTRIES LTD. (SUPRA) AND JUDGMENT OF HONBLE SUPREME COURT IS AW AITED. IN THESE CIRCUMSTANCES, WE REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT THE ASSESSING OFFICER SHOULD ADJ UDICATE THE ISSUE AS PER THE OUTCOME OF THE JUDGMENT OF HONBLE SUPREME COURT, W HICH IS AWAITED. THEREFORE STATISTICAL PURPOSES, BOTH THE APPEALS OF THE ASSES SEE ARE TREATED TO BE ALLOWED. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 12 .06.2019 SD/- ( A.T. VARKEY ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 12/06/2019 ( SB, SR.PS ) 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), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES