ACIT, Corporate Circle-1(2), Bhubaneswar V. M/s. Orissa Bridge & Construction Corporation Ltd., Bhubaneswar

ITA 26/CTK/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4389 (ITAT-CUTTACK)
• Duration Of Justice: 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 19-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: A K KAMILA
• Section: 12

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ITA NO. 447 / CTK /20 1 6 & ITA NO.26/CTK/2017 ( / ASSESSMENT YEAR S : 20 12 - 2013 & 2013 - 2 014 ) ACIT, CORPORATE CIRCLE - 1(2), BHUBANESWAR VS. M/S ODISHA BRIDGE & CONSTRUCTION CORPORATION LIMITED, SETU BHAWAN, NAYAPALLI, BHUBANESWAR ./ ./ PAN/GIR NO. : A A ACO 2565 M ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI D.K.PRADHAN, DR /AS SESSEE BY : SHRI A.K.KAMILA, AR / DATE OF HEARING : 02 / 01 /201 8 / DATE OF PRONOUNCEMENT 02 / 01 /201 8 / O R D E R PER SHRI N.S.SAINI , A M : T H ESE TWO APPEALS FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) - 1, BHUBANESWAR DATED 5.9.2016 AND AGAINST THE ORDER OF CIT(A) - 2, BHUBANESWAR, DATED 20.10.2016 FOR THE ASSESSMENT YEARS 2012 - 2013 & 2013 - 2014. 2. THE COMMON ISSUE INVOLVED IN BOTH THE A PPEALS OF THE REVENUE IS THAT THE CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.45,10,822/ - FOR THE ASSESSMENT YEAR 2012 - 2013 AND RS.40,50,416/ - FOR THE ASSESSMENT YEAR 2013 - 2014 ON ACCOUNT OF PROVISION FOR LEAVE SALARY AND PENSION. 3. BRIEF FACTS OF THE CASE ARE THAT THE AO ON PERUSAL OF BOOKS OF ACCOUNTS FOUND THAT OUTSTANDING LEAVE SALARY AND PENSION CONTRIBUTION AS ON 31.03.2012 IS RS.45,10,822/ - , HOWEVER, NO RECORDS AVAILABLE REGARDING ITA NO. 447/16 & 26/17 2 DETAILS OF OUTSTANDING BALANCE OF RS.45,10,822/ - AND THE A SSESSEE HAS FAILED TO SUBMIT THE DESIRED DETAILS OF THE SAME. HENCE, HE ADDED RS.45,10,822/ - TO THE TOTAL INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2012 - 2013 . SIMILARLY, THE AO OBSERVED FOR THE ASSESSMENT YEAR 2013 - 2014 THAT RS.40,50,416/ - DEBITED TO PROFIT AND LOSS ACCOUNT COULD NOT SUBSTANTIATE BY THE ASSESSEE, AND, THEREFORE, HE ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 4. ON APPEAL, THE CIT(A) DELETED THE ADDITIONS FOR THE RESPECTIVE ASSESSMENT YEARS UNDER CONSIDERATION I.E. A.YS. 2012 - 20 13 & 2013 - 2014 ON THE GROUND THAT THE AO HAS NOT EXAMINED THE PROFIT AND LOSS ACCOUNT PRODUCED BY THE ASSESSEE BEFORE OBSERVING THAT PROVISION WAS DEBITED TO THE PROFIT AN D LOSS ACCOUNT AND ALLOWED THIS GROUND OF APPEAL OF THE ASSESSEE FOR BOTH THE ASSESS MENT YEARS UNDER APPEAL. 5. AGAINST THE ORDER OF CIT(A), THE REVENUE IS IN APPEAL S BEFORE US. 6. LD. DR RELIED ON THE ORDER OF AO. 7. ON THE OTHER HAND, LD. AR OF THE ASSESSEE REITERATED THE SUBMISSION S MADE BEFORE THE CIT(A). 8. WE HAVE HEARD RIVAL SUBM ISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE , THE AO MADE ADDITION OF RS.45,10,822/ - FOR THE ASSESSMENT YEAR 2012 - 2013 AND RS.40,50,416/ - FOR THE ASSESSMENT YEAR 2013 - 2014 BY DISALLOWING PROVISION FOR LEAVE SALARY AND PENSION ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE THE DESIRED DETAILS EVEN AFTER AFFORDING OPPORTUNITY OF FILING THE SAME. THE AO HELD THE LIABILITY AS BOGUS. ON APPEAL, THE CIT(A) ITA NO. 447/16 & 26/17 3 DELETED THE ADDITION FOR THE ASSESSMENT YEAR 2 012 - 2013 (I.E. ITA NO.447/CTK/2016) OBSERVING AS UNDER : - 3.1 I HAVE CONSIDERED THE MATTER. IN THE COURSE OF APPEAL HEARING, THE ID. AR OF THE ASSESSEE HAS CONTENDED THAT THE AO'S OBSERVATION THAT AN AMOUNT OF RS.45,10,822/ - WAS DEBITED TO P&L ACCOUNT OF - T HE CURRENT YEAR IS NOT CORRECT. IN FACT, THE AMOUNT REPRESENTS THE PROVISIONS CREATED FOR LEAVE SALARY AND PENSION CONTRIBUTION IN EARLIER YEARS. SINCE NO PART OF THE PROVISION HAS BEEN DEBITED TO THE P&L ACCOUNT OF THE CURRENT PREVIOUS YEAR, IT IS ARGUED THAT NO DISALLOWANCE CAN BE MADE BY THE AO. IN THIS REGARD, I HAVE PERUSED THE ACCOUNTS FURNISHED BY THE ASSESSEE AND FIND THAT THE CONTENTION OF THE ID. AR OF THE ASSESSEE IS CORRECT. IT APPEARS THAT THE AO HAS NOT EXAMINED THE P&L ACCOUNT SERIOUSLY BEFOR E OBSERVING THAT THE PROVISION WAS DEBITED TO THE P&L ACCOUNT. MOREOVER, THE AO HAS NO MATERIALS WITH HIM TO OBSERVE THAT THE LIABILITY OF RS.45,10,822/ - WAS BOGUS. IN VIEW OF THIS, THERE IS NO JUSTIFICATION TO MAKE THE IMPUGNED ADDITION AS HAS BEEN MADE BY THE AO. THE ADDITION OF RS.45,10,822/ - IS DELETED. THE CIT(A) WHILE DELETING THE ADDITION FOR THE ASSESSMENT YEAR 2013 - 2014 (I.E. ITA NO. 26/CTK/2017) OBSERVED AS UNDER : - 3.2 DURING THE APPEAL PROCEEDINGS, THE APPELLANT HAS STATED THAT THE AMOUNT OF R S. 40,50,416/ - DISALLOWED BY THE ASSESSING OFFICER, IS BROUGHT FORWARD PROVISION OF LEAVE SALARY AND PENSION CONTRIBUTION WHICH HAS BEEN CARRIED FORWARDED FOR THE SEVERAL YEARS AND IT IS REFLECTED IN THE BALANCE SHEET. THE APPELLANT HAS FURTHER STATED THAT THERE WAS CARRY FORWARD PROVISION OF LEAVE SALARY OF RS. 45;10,802/ - , PERTAINING TO A.Y. 2012 - 13 AND IT WAS ADDED BACK TO THE PROFIT OF THE APPELLANT IN A.Y. 2012 - 13 AND THAT THE SAME AMOUNT CANNOT BE ADDED AGAIN IN THE 'A.Y. 2013 - 14. I HAVE VERIFIED THE P ROFIT AND LOSS ACCOUNT AND BALANCE SHEET. IT IS SEEN THAT THE APPELLANT HAS CLAIMED LEAVE SALARY AND PENSION CONTRIBUTION OF RS.12,37,626/ - IN A.Y. 2013 - 14. THE AMOUNT OF LEAVE SALARY AND PENSION CONTRIBUTION OF RS.40,50,416/ - ADDED BY THE ASSESSING OFFICE R IS REFLECTED IN THE BALANCE SHEET AND IS CARRIED FORWARD FROM EARLIER YEAR. IN THE A.Y. 2012 - 13, AN AMOUNT OF RS.45,10,822/ - WAS ADDED BY THE ASSESSING OFFICER. CONSIDERING THESE FACTS, IT IS HELD THAT ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LEAVE SALARY AND PENSION CONTRIBUTION OF RS. 40,50,416/ - , IS UNWARRANTED AND SAME IS ORDERED TO BE DELETED. ACCORDINGLY, GROUNDS OF APPEAL ARE ALLOWED. LD. DR COULD NOT POINT OUT ANY SPECIFIC ERROR IN THE ORDER OF THE CIT(A). HENCE, WE FIND NO GOOD REASO N TO INTERFERE WITH THE ORDER OF CIT(A) IN ITA NO. 447/16 & 26/17 4 BOTH THE APPEALS UNDER CONSIDERATION. WE CONFIRM THE SAME AND DISMISS THE GROUNDS OF APPEAL OF REVENUE RAISED IN BOTH THE APPEALS. 9 . IN THE RESULT, BOTH APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUN CED IN THE OPEN COURT ON THIS 02 / 01 /201 8 . SD/ - ( PAVAN KUMAR GADALE ) SD/ - (N. S. SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 02 /01/2018 . . / PKM , SENIOR PRIVATE SEC RETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - ACIT, CORPORATE CIRCLE - 1(2), BHUBANESWAR 2. / THE RESPONDENT - M/S ODISHA BRIDGE & CONSTRUCTION CORPORATION LIMITED, SETU BHAWAN, NAYAPALLI, B HUBANESWAR 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//