ACIT 10(1), MUMBAI V. IL & FS MARITIME INFRASTRUSTRUCTURE CO.LTD, MUMBAI

ITA 4713/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5035 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2008-2009
• Appeal Filed On: 16-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D V LAKHANI
• Keywords: Additional evidence
• Section: 43B; 143(3)

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI . , , ! ! ! ! '# $% '# $% '# $% '# $% , ,, , & & & & ' ' ' ' BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER . / ITA NO. 4713/MUM./2012 ( &) * !+* / ASSESSMENT YEAR : 200809 ) DY. COMMISSIONER OF INCOME TAX CIRCLE10(1), AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .. ,- / APPELLANT ) V/S M/S. IL & FS MARITIME INFRASTRUCTURE COMPANY LTD., THE IL & FS FINANCIAL CENTRE, PLOT NO.C22, G BLOCK BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI 400 051 .... ./,- / RESPONDENT , . / PERMANENT ACCOUNT NUMBER AABCI7029R 1! 2 3 / REVENUE BY : MR. O.P. SINGH &) *4# 2 3 / ASSESSEE BY : MR. D.V. LAKHANI )! 2 # / DATE OF HEARING 22.08.2013 $ 5+ 2 # / DATE OF ORDER 13.09.2013 $ $ $ $ / ORDER '# $% '# $% '# $% '# $% , ,, , & & & & 6 6 6 6 / PER AMIT SHUKLA, J.M. THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENU E, CHALLENGING THE IMPUGNED ORDER DATED 9 TH APRIL 2012, PASSED BY THE LEARNED COMMISSIONER (APPEALS)-XXI, MUMBAI, FOR THE QUANTUM OF ASSESSMENT M/S. IL & FS MARITIME INFRASTRUCTURE CO. LTD., 2 PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) FOR THE ASSESSMENT YEAR 200809, VIDE WHICH, FOLLOWING GROUNDS HAVE BEEN RAISED: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW , THE LD. CIT(A)ERRED IN DELETING THE DISALLOWANCE OF RS. 13, 54,284/- U/S 43B MADE BY THE A.O 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN A DMITTING ADDITIONAL EVIDENCES PRODUCED BY ASSESSEE IN CONTRAVENTION OF RULE 46A OF THE I.T.RULES, 1962. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDENCES WITH OUT GIVING OPPORTUNITY TO THE ASSESSING OFFICER TO VERIFY IT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD.CIT(A) HAS ERRED IN NOT GIVING OPPORTUNITY TO A.O TO EXAMI NE NEW EVIDENCE AND HAS THEREBY VIOLATED THE PROVISIONS OF RULE 46A OF I.T. RULES. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE IS MA INTAINING MERCANTILE SYSTEM OF ACCOUNTING, HENCE OUTSTANDING ON ACCOUNT OF LEAV E ENCASHMENT IS LIABLE TO BE DISALLOWED U/S 43B. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD.CIT(A) FAILED TO APPRECIATE THAT AS PER TAX AUDIT REPORT, AN AMOUNT OF RS. 13,54,284/- WAS OUTSTANDING ON ACCOUNT OF LEAVE ENC ASHMENT ON THE DUE DATE OF FILING OF RETURN OF INCOME, AND ACCORDINGLY THE SAME IS LIABLE TO BE DISALLOWED U/S 43B. 7. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . 2. THE ASSESSING OFFICER, IN THE PRESENT CASE, ON A PE RUSAL OF TAX AUDIT REPORT, SPECIFICALLY CLAUSE21(1)(A), NOTICED THAT THE ASSESSEE HAD SHOWN LEAVE ENCASHMENT OF ` 13,54,284, AS OUTSTANDING AS ON 31 ST MARCH 2008. THE ASSESSING OFFICER FURTHER NOTED THAT IN RESPONSE TO THE SHOW CAUSE NOTICE AS TO WHY THE SAME SHOULD NOT BE DISALLOWED UNDER SECT ION 43B, THE ASSESSEE COULD NOT FILE ANY DETAILS TO EXPLAIN THIS ISSUE. A CCORDINGLY, THE SAID SUM OF ` 13,54,284 WAS ADDED TO THE TOTAL INCOME. 3. BEFORE THE LEARNED COMMISSIONER (APPEALS), IT WAS S UBMITTED THAT CERTAIN EMPLOYEES WERE TRANSFERRED FROM IL&FS TRANS PORTATION NETWORKS LTD. M/S. IL & FS MARITIME INFRASTRUCTURE CO. LTD., 3 THE LEAVE ENCASHMENT LIABILITY OF THE CONCERN TO TH E EXTENT OF ` 11,19,530 WAS ALSO TRANSFERRED TO THE ASSESSEE. THE ASSESSEE HAS NOT DEBITED THIS AMOUNT IN THE PROFIT AND LOSS ACCOUNT AND HAS NOT M ADE ANY CLAIM OF DEDUCTION WHILE COMPUTING THE TAXABLE INCOME. THE A SSESSING OFFICER HAS DISALLOWED ` 11, 19,530 BY INVOKING THE PROVISIONS OF SECTION 4 3B WITHOUT VERIFYING THE SAME AND, THEREFORE, THE PROVISIONS O F SECTION 43B ARE NOT APPLICABLE TO THIS EXTENT. THE ASSESSEE HAS ONLY DE BITED IN THE PROFIT & LOSS ACCOUNT A SUM OF ` 2,34,754 AND THE SAID AMOUNT HAS BEEN DISALLOWED I N THE COMPUTATION OF INCOME. THE ASSESSING OFFICER HAS ER RONEOUSLY, ONCE AGAIN, TAXED THE SAID AMOUNT WHILE PASSING THE ORDER. THUS , THERE IS A DOUBLE ADDITION IN RESPECT OF ` 2,34,754. 4. THE LEARNED COMMISSIONER (APPEALS), AFTER VERIFYING THE RECORDS AS SUBMITTED BY THE ASSESSEE, ACCEPTED THE ASSESSEES CONTENTION THAT LEAVE ENCASHMENT AMOUNT OF ` 11,19,530, WAS DEBITED BY THE ASSESSEE TO IL&FS TRANSPORTATION NETWORKS LTD. AND THE BALANCE AMOUNT OF ` 2,34,574 WHICH WAS DEBITED TO THE PROFIT & LOSS ACCOUNT WAS ADDED BACK IN THE COMPUTATION OF INCOME AND, THEREFORE, THE ASSESSEE HAS NOT CLAI MED ANY DEDUCTION OF ENTIRE LEAVE ENCASHMENT AMOUNTING TO ` 13,54,284. THE ADDITION WAS, THEREFORE, DELETED. THE RELEVANT OBSERVATIONS OF TH E LEARNED COMMISSIONER (APPEALS) ARE AS UNDER: 2.3 I HAVE CONSIDERED THE FACTS OF THE CASE. IN T HE P & L ACCOUNT THE APPELLANT CLAIMED OPERATING & ADMINISTRATION EXPENS ES AT RS.4,08,02,298/-, THE DETAILS OF WHICH WERE IN SCHEDULE F. AS PER S CHEDULE F THE OPERATING AND ADMINISTRATION EXPENSES WAS CONSISTING OF EMPLOYEES COST (REFER SCHEDULE H ON NOTE NO.5 AND 6) AT RS.1,45,22,942/-. THE APPELL ANT HAS ALSO FILED GROUPINGS OF EMPLOYEE COST AT RS. 1,45,22,942/- WHI CH CONSISTS OF LEAVE SALARY AT RS.2,34,754/-. THE APPELLANT HAS ALSO FIL ED COPY OF ACCOUNT OF PROVISIONS FOR LEAVE ENCASHMENT SHOWING THE CLOSING BALANCE OF RS.13,54,284/-. THE COPY OF ACCOUNT SHOWS THAT THE LEAVE ENCASHMENT AMOUNT OF RS. 11,19,530/- WERE DEBITED BY APPELLANT TO IL&FS TRANSPORTATION NETWORKS LTD. AND THE BALANCE AMOUNT OF RS.2,34,574 /- (DEBITED TO P & L ACCOUNT) WAS ADDED BACK IN COMPUTATION OF INCOME. T HUS, THE APPELLANT HD T CLAIMED ANY DEDUCTION OF ENTIRE LEAVE ENCASHMENT AM OUNT OF RS. 13,54,284/-. THE ADDITION MADE BY AO IS THEREFORE, DELETED. M/S. IL & FS MARITIME INFRASTRUCTURE CO. LTD., 4 5. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT ALL THESE SHOULD HAVE BEEN POINTED OUT BEFORE THE ASSES SING OFFICER WHICH HAVE NOT BEEN DONE AS THE ASSESSEE HAS NOT SUBMITTED ANY DETAILS BEFORE THE ASSESSING OFFICER DESPITE OF BEING ASKED BY HIM. TH EREFORE, THE DETAILS FURNISHED BEFORE THE LEARNED COMMISSIONER (APPEALS) ARE ADDITIONAL EVIDENCE AND IS IN VIOLATION OF THE PROVISIONS OF RULE 46A U NDER THE INCOME TAX RULES, 1962 AND, THEREFORE, THE ENTIRE MATTER SHOULD BE RE STORED BACK TO THE FILE OF THE ASSESSING OFFICER. 6. BEFORE US, THE LEARNED COUNSEL SUBMITTED THAT INSOF AR AS ` 2,34,754 IS CONCERNED, THE SAME WAS ALREADY DISALLOWED BY THE A SSESSEE IN THE COMPUTATION FILED ALONG WITH THE RETURN OF INCOME W HICH IS IN THE RECORD OF THE ASSESSING OFFICER. THE OTHER AMOUNT OF ` 11,19,530, WAS NOT DEBITED TO THE PROFIT & LOSS ACCOUNT AND THE ASSESSEE HAS NOT MADE ANY CLAIM, THEREFORE, THERE IS NO QUESTION OF DISALLOWANCE AND NO QUESTION OF FURNISHING OF ADDITIONAL EVIDENCE. THE ASSESSEE HAS MERELY CLA RIFIED THIS THROUGH THE ACCOUNTS FURNISHED BEFORE THE ASSESSING OFFICER ONL Y. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS, PERUSED THE RELEVANT FINDINGS OF THE ASSESSING OFFICER AS WELL AS THE LEARNED COMMISSIONER (APPEALS) AND THE MATERIAL PLACED ON R ECORD. ON A PERUSAL OF THE COMPUTATION OF INCOME, IT IS EVIDENT THAT THE A SSESSEE HAS ADDED BACK A SUM OF ` 2,34,754 ON ACCOUNT OF LEAVE ENCASHMENT, THEREFORE , THERE IS NO QUESTION OF AGAIN DISALLOWING THE SAME. INSOFAR AS THE BALANCE AMOUNT OF ` 11,19,530 IS CONCERNED, ON A PERUSAL OF THE PROFIT & LOSS ACCOUNT, IT IS EVIDENT THAT THE ASSESSEE HAS NOT DEBITED THIS AMOU NT TO THE PROFIT & LOSS ACCOUNT HENCE, THERE IS NO QUESTION OF ANY CLAIM OF LEAVE ENCASHMENT IN THIS YEAR. BEFORE THE LEARNED COMMISSIONER (APPEALS), TH IS HAS BEEN DULY EXPLAINED WHICH WAS APPRECIATED BY THE LEARNED COMM ISSIONER (APPEALS) AS HAVE BEEN NOTED BY HIM AS ABOVE. THERE IS NO QUESTI ON OF FURNISHING OF ADDITIONAL EVIDENCE OR VIOLATION OF THE PROVISIONS OF RULE 46A AS THE LEARNED COMMISSIONER (APPEALS) HAS COTERMINUS POWER WITH T HAT OF THE ASSESSING M/S. IL & FS MARITIME INFRASTRUCTURE CO. LTD., 5 OFFICER AND HE HAS MERELY VERIFIED THE ASSESSEES C ONTENTION FROM THE AUDIT ACCOUNT AND THE RECORDS AVAILABLE. THUS, WE DO NOT FIND ANY REASON TO DEVIATE FROM THE FINDINGS RECORDED BY THE LEARNED C OMMISSIONER (APPEALS) AND, ACCORDINGLY, THE SAME IS CONFIRMED. 8. 4 #7 1! 2 41 ) 1# 89 : 8. IN THE RESULT, REVENUES APPEAL IS TREATED AS DI SMISSED. $ 2 5+ ; <)7 13 TH SEPTEMBER 2013 2 = : ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH SEPTEMBER 2013 SD/- . .. . B. RAMAKOTAIAH ACCOUNTANT MEMBER SD/- '# '# '# '# $% $% $% $% & & & & AMIT SHUKLA JUDICIAL MEMBER MUMBAI, <) <) <) <) DATED : 13 TH SEPTEMBER 2013 $ 2 .&#'> ?>+# / COPY OF THE ORDER FORWARDED TO : (1) &) *4# / THE ASSESSEE; (2) 1! / THE REVENUE; (3) @ () / THE CIT(A); (4) @ / THE CIT, MUMBAI CITY CONCERNED; (5) >!C= .&#&) , , / THE DR, ITAT, MUMBAI; (6) =D* E / GUARD FILE. /># .&# / TRUE COPY $) / BY ORDER . 1. FG / PRADEEP J. CHOWDHURY !4H &)1 F! / SR. PRIVATE SECRETARY I / 8 1 / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI