Bates India Pvt Ltd, Kolkata V. D.C.I.T Cir -8 , kolkata, Kolkata

ITA 423/KOL/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3133 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 01-03-2013
• Result in Favour of: Set Aside
• Court: TRIBUNAL
• Assessee Lawyers: ABHAY RUIA ACA
• Section: 43B; 143(3)

Judgement Text

ITA NO. 423/KOL/2013-B-AM M/S. BATES INDIA PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, K OLKATA BEFORE : SHRI N.V. VASUDEVAN, JUDICIAL MEMBER, AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER I.T.A NO. 423/KOL/2013 A.Y : 2009-10 M/S. BATES INDIA PVT. LTD VS. DEPUTY COMM ISSIONER OF INCOME-TAX PAN: AABCC 3474A CIRCLE-8, KOLKATA (APPELLANT) (RE SPONDENT) FOR THE APPELLANT: S/SHRI MUNISH SHETH ABHAY RUIA, ACA, LD.ARS FOR THE RESPONDENT: NONE APPEA RED DATE OF HEARING: 28-01-2016 DATE OF PRONOUNCEMENT: 03-02-20 16 ORDER SHRI M.BALAGANESH, AM THIS APPEAL OF THE ASSESSEE ARISES OUT OF THE O RDER OF THE LEARNED CIT(A)-VIII, KOLKATA IN APPEAL NO. 182/CIT(A)-VIII/KOL/11-12 D ATED 07/12/2012 FOR THE ASSESSMENT YEAR 2009-10 AGAINST THE ORDER OF ASSES SMENT FRAMED BY THE LEARNED AO U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT). 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE ASSESSEE IS ENTITLED FOR DEDUCTION TOWARDS LEAVE ENCASHMENT AMOUNTING T O RS.38,07,649/- U/S. 43B(F) OF THE ACT. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASS ESSEE HAS MADE A PROVISION FOR LEAVE ENCASHMENT AMOUNTING TO RS. 38, 07,649/- IN ITS P & L ACCOUNT AND CLAIMED THE SAME AS DEDUCTION IN ITS RETURN OF INCOME. THE LD. AO DURI NG THE COURSE OF ASSESSMENT PROCEEDING DISALLOWED THE SAME AS PER PROVISION OF SECTION 43B (F) OF THE ACT, WHEREIN THE LEAVE ENCASHMENT COULD BE GRANTED AS DEDUCTION ONLY ON P AYMENT BASIS. THIS ACTION OF THE ITA NO. 423/KOL/2013-B-AM M/S. BATES INDIA PVT. LIMITED 2 LD.AO WAS UPHELD BY THE LD.CIT(A) ON 1 ST APPEAL. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS :- 1(A). THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN DISALLOWING PROVISION FOR LEAVE ENCASHME NT AMOUNTING TO RS. 38,07,649 INVOKING THE PROVISIONS OF SECTION 43B OF THE ACT. 1(B). THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, ASSESSING OFFICER ERRED IN DISALLOWING THE IMPUGNED SUM DISRE GARDING A BINDING DECISION OF THE HONBLE HIGH COURT OF JURISDICTION. 4. NONE APPEARED ON BEHALF OF THE REVENUE. SO WE HAVE PROCEEDED TO DISPOSE OFF THE APPEAL AFTER HEARING THE LD.AR AND PERUSING THE MAT ERIAL AVAILABLE ON RECORD. 5. THE LD. AR ARGUED THAT THE ISSUE IS COVERED BY T HE DECISION OF THE HONBLE JURISDICTIONAL CALCUTTA HIGH COURT IN THE CASE OF E XIDE INDUSTRIES LTD VS. UNION OF INDIA REPORTED IN (2007) 164 TAXMAN 9 (CAL)/292 ITR 470( CAL). ON FURTHER APPEAL BY THE REVENUE BEFORE THE HONBLE SUPREME COURT, THE HONB LE SUPREME COURT INITIALLY HAD STAYED THE JUDGMENT OF THE HONBLE JURISDICTIONAL CALCUTTA HIGH COURT IN THE CASE OF (REFERRED TO SUPRA), BUT IN SUBSEQUENT PROCEEDINGS IT UPHELD THE CONSTITUTIONAL VALIDITY OF THE PROVISION OF SECTION AND PERMITTED THE ASSESSE S TO CLAIM THE PROVISION OF LEAVE ENCASHMENT IN ITS RETURN OF INCOME AS DEDUCTION , B UT DIRECTED THE ASSESSES TO PAY THE TAXES ON THE SAME AS IF SECTION 43B(F) IS PREVAILIN G IN THE STATUTE. 6. WE HAVE HEARD THE LD.AR AND PERUSED THE MATER IALS AVAILABLE ON RECORD. WE FIND THAT THE ISSUE HAS BEEN DEALT BY THE HONBLE JURISDICTIO NAL CALCUTTA HIGH COURT IN THE CASE OF ASSESSEES OWN (REFERRED TO SUPRA), WHEREIN THE HON BLE CALCUTTA HIGH COURT HAD STRUCK DOWN THE CONSTITUTIONAL VALIDITY AS PER PROVISIONS OF SECTION 43B(F) OF THE ACT AND PLACED RELIANCE ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF BHARAT EARTH MOVERS LIMITED REPORTED IN 245 ITR 428(SC). WE FIND THAT THE APPEAL FILED BY THE REVENUE ON THIS ISSUE, THE HONBLE SUPREME COURT HAD INITIALLY ST AYED THE OPERATION OF THE JUDGMENT OF THE HONBLE CALCUTTA HIGH COURT VIDE ORDER DATED 8- 9-2008. BUT LATER VIDE SUBSEQUENT ORDER DATED 8/05/2009 IN APPEAL (CIVIL) NOS. 22889/ 2008 HAD HELD AS UNDER:- ITA NO. 423/KOL/2013-B-AM M/S. BATES INDIA PVT. LIMITED 3 UPON HEARING COUNSEL THE COURT MADE THE FOLLOWING ORDER DELAY CONDONED. LEAVE GRANTED. PENDING HEARING AND FINAL DISPOSAL OF THE CIVIL AP PEAL, DEPARTMENT IS RESTRAINED FROM RECOVERING PENALTY AND INTERES T WHICH HAS ACCRUED TILL DATE. IT IS MADE CLEAR THAT AS FAR AS THE OUTS TANDING INTEREST DEMAND AS OF DATE IS CONCERNED, IT WOULD BE OPEN T O THE DEPARTMENT TO RECOVER THAT AMOUNT IN CASE CIVIL APPEAL OF THE DEPARTMENT IS ALLOWED. WE FURTHER MAKE IT CLEAR THAT THE ASSESSEE WOULD, DURING THE PENDENCY OF THIS CIVIL APPEAL, PAY TAX AS IF SECTIO N 43B(F) IS ON THE STATUTE BOOK BUT AT THE SAME TIME IT WOULD BE ENTIT LED TO MAKE A CLAIM IN ITS RETURNS. IN VIEW OF THE ABOVE, WE DEEM IT FIT AND APPROPRIAT E, IN THE INTEREST OF JUSTICE AND FAIR PLAY, TO SET ASIDE THIS ISSUE TO THE FILE OF THE LD.AO TO PASS A FRESH ORDER(S) ON THIS ISSUE BASED ON THE OUTCOME OF THE MAIN APPEAL ON ME RITS IN THE LIGHT OF THE JUDGMENT OF THE HONBLE SUPREME COURT AS STATED ( SUPRA). ACCO RDINGLY, THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL ARE ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSE AS STATED ABOVE. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 03-02-20 16 1 THE APPELLANT: M/S. BATES INDIA PVT. LTD 55B MI RZA GHALIB ST, KOL-16. SD/- ( N.V. VASUDEVAN, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE: DATE 03-02-2016 COPY OF THE ORDER FORWARDED TO:- ITA NO. 423/KOL/2013-B-AM M/S. BATES INDIA PVT. LIMITED 4 2 THE RESPONDENT- THE DEPUTY COMMISSIONER OF INCOM E-TAX, CIR-8, AAYKAR BHABAN, KOL-69. 3 THE CIT 4.THE CIT(A) 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP SPS