The DCIT, Circle-1(1), Baroda V. Camphor & Allied Products Ltd., Baroda

ITA 3490/AHD/2010

• Counselvise Citation: 349020514 RSA 2010
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 30-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K PATEL
• Assessee Lawyers: C N SHAH A R
• Section: 115JB

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , .'.#$%, '& ' ' BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ./ I.T.A. NO.3490/AHD/2010 ( ) * ) * ) * ) * / / / / ASSESSMENT YEAR : 2005-06) DCIT CIR.1 (1) BARODA ) ) ) ) / VS. M/S.CAMPHOR & ALLIED PRODUCTS LTD. PLOT NO.3, GIDC INDUSTRIAL ESTATE NANDESARI, BARODA + '& ./,- ./ PAN/GIR NO. : AAACC9211E ( +. / // / APPELLANT ) .. ( /0+. / RESPONDENT ) +. 1 ' / APPELLANT BY : SHRI A.K. PATEL, D.R. /0+. 2 1 ' / RESPONDENT BY : SHRI C.N. SHAH, A.R. )3 2 & / / / / DATE OF HEARING : 30/09/2011 4$* 2 & / DATE OF PRONOUNCEMENT : 14.10.11 '5 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WHI CH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-I, BARODA DA TED 18.10.2010 PASSED FOR A.Y. 2005-06 AND THE ONLY GRO UND READS AS FOLLOWS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(APPEALS) ERRED IN DELETING THE ADDITION OF ` 28,15,000/- TO THE BOOK PROFIT U/S.115JB ON ACCOUNT OF PROVISIO NS FOR LEAVE ITA NO.3490/AHD /2010 DCIT VS. M/S.CAMPHOR & ALLIED PRODUCTS LTD. ASST.YEAR - 2005-06 - 2 - ENCASHMENT IGNORING THE FACT THAT THE LIABILITY DO NOT FORM PART OF ASCERTAINED LIABILITY. 2. FACTS IN BRIEF AS EMERGED FROM THE ASSESSMENT OR DER PASSED U/S.143(3) OF THE I.T. ACT DATED 31/12/2007 WERE TH AT THE ASSESSEE- COMPANY IS IN THE BUSINESS OF MANUFACTURING OF CHEM ICALS. IT WAS NOTED BY THE AO THAT WHILE COMPUTING THE BOOK PROFIT U/S. 115JB A PROVISION IN RESPECT OF LEAVE ENCASHMENT OF RS.28,15,000/- WAS N OT ADDED. THE ASSESSEES CONTENTION WAS THAT THE SAID PROVISION W AS MADE AS PER THE ACCOUNTING STANDARDS IN RESPECT OF A LIABILITY BASE D UPON THE ACTUARIAL VALUATION. IT WAS CONTESTED THAT THE PROVISION FOR LEAVE ENCASHMENT LIABILITY WAS AN ASCERTAINED LIABILITY. HOWEVER, T HE AO WAS NOT CONVINCED AND HELD THAT THE SAID LIABILITY WAS NOT AN ASCERTAINED LIABILITY BECAUSE MERELY A PROVISION WAS MADE. ACCORDINGLY, THE SAME WAS ADDED WHILE COMPUTING THE BOOK PROFIT U/S.115JB OF THE ACT. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHO RITY WHO HAS HELD THAT THE ISSUE IS DIRECTLY COVERED BY BHARAT EARTH MOVERS V. CIT 245 ITR 428 (SC). 3. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE VIEW THAT THE ISSUE NOW STOOD FULLY COVERED BY THE AFORE MENTIONED DECISION OF BHARAT EARTH MOVERS(SUPRA). IT HAS ALSO BEEN STATE D THAT A REQUISITE CERTIFICATE IN RESPECT OF LEAVE ENCASHMENT LIABILIT Y CALCULATED ON THE BASIS OF ACTUARIAL METHOD WAS PLACED BEFORE THE AUTHORITI ES BELOW. IN THE LIGHT OF THE SAID CERTIFICATE, IT IS ASSERTED BEFORE US T HAT SINCE THE CLAIM WAS DULY SUPPORTED BY A COGENT EVIDENCE, THEREFORE IT W AS RIGHTLY ALLOWED BY ITA NO.3490/AHD /2010 DCIT VS. M/S.CAMPHOR & ALLIED PRODUCTS LTD. ASST.YEAR - 2005-06 - 3 - CIT(A). UNDER THE TOTALITY OF THE CIRCUMSTANCES, W E HEREBY AFFIRM THE VIEW TAKEN BY THE LD.CIT(A) AND DISMISS THIS GROUND OF THE REVENUE. 4. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED . ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 14.10. 2011. SD/- SD/- ( A.K. GARODIA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEM BER AHMEDABAD; DATED 14 / 10 /2011 6..), .)../ T.C. NAIR, SR. PS '5 2 /7 8'7* '5 2 /7 8'7* '5 2 /7 8'7* '5 2 /7 8'7*/ COPY OF THE ORDER FORWARDED TO : 1. +. / THE APPELLANT 2. /0+. / THE RESPONDENT. 3. 9 / CONCERNED CIT 4. 9() / THE CIT(A)-I,BARODA 5. 7<# /) , , / DR, ITAT, AHMEDABAD 6. # =3 / GUARD FILE. '5) '5) '5) '5) / BY ORDER, 07 / //TRUE COPY// > >> >/ // / , , , , ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION..10.10.2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 10.10.2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 14.10.11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 14.10.11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER