Jones Lang Lasalle Property Consultants (India) Private Ltd., New Delhi V. ITO, New Delhi

ITA 4331/DEL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3942 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 06-05-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 12-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Keywords: Competent authority
• Section: 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D: NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER & SHRI K.D. RANJAN, ACCOUNTANT MEMBER ITA NO. 4331/DEL/2009 ASSESSMENT YEAR: 2004-05 M/S. JONES LANG LASALLE PROPERTY CONSULTANTS INDIA PVT. LTD., 1108-1110, ASHOKA ROAD, BARAKHAMBA ROAD, NEW DELHI VS. INCOME TAX OFFICER, WARD 4(1), C.R. BUILDING, NEW DELHI PAN: AACL 2089 B APPELLANT RESPONDENT APPELLANT BY : SHRI ANJANI KUMAR PANDEY, EXE. FINANCE RESPONDENT BY : SHRI B.K. GUPTA, SR. DR O R D E R PER: C.L. SETHI, J.M. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 16.09.2009 PASSED BY THE LD. CIT(A) IN THE MATTER OF AN ASSESSMENT MADE BY THE AO U/S. 143(3) OF THE INCOME TAX ACT, 1961, (THE ACT) FOR THE A.Y. 2004-05. 2. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS A S UNDER: UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACT ION OF LEARNED ASSESSING OFFICER (LD. AO) IN DISALLOWING THE DEDUCTION AMOUNTING TO RS. 1,523,120/- CLAIMED BY T HE APPELLANT AS AMOUNT PAID TOWARDS GRATUITY FUND FOR WHICH APPROVAL FROM THE CONCERNED CIT IS PENDING. 3. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARIN G TOTAL INCOME AT RS. 1,02,29,000/- AS PER NORMAL COMPUTATION OF INCOME U NDER THE ACT, AND HAS ITA NO. 4331/DEL/2009 PAGE 2 OF 4 ALSO SHOWN BOOK PROFIT U/S. 115JB AT RS. 6,43,48,18 3/-. THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS FINALLY CO MPLETED U/S. U/S. 143(3) OF THE ACT ON 26.12.2006. WHILE COMPUTING THE TOTA L INCOME UNDER NORMAL PROVISIONS OF THE ACT, THE AO DISALLOWED THE PROVIS IONS OF GRATUITY AMOUNTING TO RS. 15,23,120/- BY OBSERVING THAT THE ASSESSEES CLAIM TOWAR4DS PROVISIONS FOR GRATUITY CANNOT BE ALLOWED IN THE ABSENCE OF APPROVAL OF GRATUITY FUND. THE ASSESSEE CONTENDED BEFORE THE AO THAT THE ASSESSEE HAS APPLIED FOR APPROVAL OF THE GRATUITY S CHEME VIDE ITS APPLICATION DATED31.03.2004 BEFORE THE CCIT, RANGE 11, BANAGALO RE. BUT THIS CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO BY OBSERVING THAT THE ASSESSEE COMPANY IS ASSESSED IN THE CHARGE OF CIT, DELHI - II, NEW DELHI, AND IT IS NOT CLEAR WHY THE APPLICATION FOR APPROVA L OF THE GRATUITY SCHEME WAS FILED WITH THE CCIT, RANGE - 11, BANAGALORE. T HE AO TREATED THE APPLICATION FILED FOR APPROVAL OF FUND TO BE BEYOND JURISDICTION AND NON-EST. 4. BEING AGGRIEVED, THE ASSESSEE HAD TAKEN UP THE M ATTER BEFORE THE LD. CIT(A). 5. THE CIT(A) UPHELD THE ORDER OF THE AO BY OBSERVI NG THAT UNLESS THE ASSESSEE FULFILLS ALL THE CONDITIONS LAID DOWN IN S ECTION 40A(7) FOR GRATUITY FUND, THE PROVISIONS MADE FOR GRATUITY CANNOT BE AL LOWED. 6. HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIB UNAL. ITA NO. 4331/DEL/2009 PAGE 3 OF 4 7. WE HAVE HEARD THE LD. DR, AND THE EMPLOYEE PRESE NT FOR THE ASSESSEE COMPANY, WHO IS THE EXECUTIVE FINANCE. 8. ON PERUSAL OF THE AOS ORDER, IT IS SEEN THAT TH E ASSESSEE MADE AN APPLICATION FOR APPROVAL BEFORE THE CCIT, RANGE - 1 1, BANAGALORE. THE AO HAS STATED THAT THE ASSESSEE SHOULD HAVE FILED APPL ICATION FOR APPROVAL WITHIN THE RANGE OF CIT, DELHI. IT IS NOT CLEAR WHAT IS T HE OUTCOME OF THE ASSESSEES APPLICATION FOR APPROVAL OF GRATUITY FILED BEFORE T HE CCIT, RANGE - 11, BANAGALORE. IT IS NOT CLEAR WHETHER THE CCIT, RANG E 11, BANAGALORE HAS TRANSFERRED THE ASSESSEES APPLICATION TO CCIT, DEL HI. IT HAS BEEN EXPLAINED BY THE ASSESSEE SINCE THE ASSESSEE HAVE HAD BUSINES S AT BOTH THE PLACES, I.E., DELHI AND BANAGALORE, THE ASSESSEE FILED APPLICATIO N FOR APPROVAL BEFORE THE CCIT, RANGE - 11, BANAGALORE. BE THAT AS IT MAY, I T IS NOT IN DISPUTE THAT THE ASSESSEE MADE AN APPLICATION FOR APPROVAL OF GRATUI TY FUND, VIDE APPLICATION DATED 31.03.2004. UNDER THESE PECULIAR CIRCUMSTANC ES OF THE CASE, WE, THEREFORE, RESTORE THE MATTER BACK TO THE FILE OF T HE AO FOR HIS FRESH ADJUDICATION FOR ASCERTAINING AS TO WHETHER THE ASS ESSEE HAS IN THE MEANTIME GRANTED APPROVAL WITH REGARD TO THE GRATUITY FUND U /S. 40A(7) OF THE ACT. IT WILL BE UNDOUBTEDLY A DUTY OF THE ASSESSEE TO PRODU CE BEFORE THE AO, THE NECESSARY APPROVAL OF GRATUITY FUND, GRANTED BY THE CIT OR CCIT AND SHALL SUBMIT BEFORE THE AO THE NECESSARY DETAILS AND PART ICULARS AS TO THE OUTCOME OF THE ASSESSEES APPLICATION MADE U/S. 40A(7) FOR APPROVAL OF GRATUITY FUND IN RESPECT OF WHICH THE PROVISIONS HAS BEEN MADE. IN CASE, THE ASSESSEE FAILS ITA NO. 4331/DEL/2009 PAGE 4 OF 4 TO PRODUCE BEFORE THE AO ANY LETTER OF APPROVAL GRA NTED BY THE COMPETENT AUTHORITY U/S. 40A(7) AS TO THE GRATUITY FUND, THE AO SHALL IN THAT CASE BE JUSTIFIED TO DECIDE THE MATTER AS PER LAW. THE ALL OTHER CONTENTIONS AVAILABLE UNDER THE LAW TO BOTH THE PARTIES SHALL REMAIN OPEN WHILE DECIDING THE MATTER AFRESH AS PER LAW. THE AO SHALL GIVE FURTHER OPPOR TUNITY OF HEARING TO THE ASSESSEE. WE ORDER ACCORDINGLY. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED TO BE ALLOWED FOR STATISTICAL PURPOSE. 10. THIS DECISION IS PRONOUNCED IN THE OPEN COURT O N 6 TH MAY, 2010. (K.D. RANJAN) ACCOUNTANT MEMBER (C.L. SETHI) JUDICIAL MEMBER DATED: 6 TH MAY, 2010 *NITASHA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. BY ORDER DEPUTY REGISTRAR