M/s Integrated Databases India Ltd., New Delhi V. ITO, New Delhi

ITA 5055/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2808 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 23-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law
• Section: 143(3); 154; 15

Judgement Text

ITA NO. 5055/DEL/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-5055/DEL/2016 ( ASSESSMENT YEAR: 2011-12) INTEGRATED DATABASES INDIA LTD. K-9, CONNAUGHT CIRCUS, NEW DELHI. AAAC12809J VS ITO WARD 12(3) NEW DELHI ASSESSEE BY SH. SALIL AGRAWAL, ADV. SH. SHAILESH KUMAR GUPTA, CA REVENUE BY SH. ARUN KUMAR YADAV, SR.DR ORDER PER K. NARSIMHA CHARY, J.M. AGGRIEVED BY THE ORDER DATED 17.08.2016 IN APPEAL N O. 381/15- 16/119/16-17 PASSED BY THE LD. COMMISSIONER OF INCO ME TAX (APPEALS)-12, NEW DELHI (FOR SHORT CALLED AS THE L D. CIT (A) ) ASSESSEE PREFERRED THIS APPEAL. 2. BRIEFLY STATED FACTS ARE THAT FOR THE AY 2011-12 IN RESPECT OF THE ASSESSEE WAS COMPLETED U/S 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT CALLED AS THE ACT) BY ORDER DATED 24.01.201 4 AT A LOSS OF RS. 12,88,331/-. HOWEVER, DURING THE COURSE OF AUDIT S CRUTINY IT WAS FOUND THAT AN AMOUNT OF RS. 5,68,304/- AND RS. 2,80 0/- HAVE BEEN ROUTED THROUGH THE PROFIT AND LOSS ACCOUNT, WHEREAS EXPENSE WAS NOT PAID BY THE ASSESSEE DURING THE YEAR UNDER CONSIDER ATION. THE AO, THEREFORE, ISSUED A NOTICE DATED 24.01.2014 U/S 154 /155 OF THE ACT DATE OF HEARING 20.12.2017 DATE OF PRONOUNCEMENT 22.12.2017 ITA NO. 5055/DEL/2016 2 PROPOSING RECTIFICATION AND PROCEEDED TO MAKE AN AD DITION OF RS. 5,71,104/- AND DETERMINED THE NET LOSS AT RS. 7,17, 227/-. APPEAL PREFERRED BY THE ASSESSEE WAS DISMISSED BY THE LD. CIT (A) BY WAY OF IMPUGNED ORDER. HENCE, THE ASSESSEE IS IN THIS APP EAL. 3. LD. AR ARGUED THAT THE DETAILS OF EXPENSES ON AC COUNT OF THE CLAIM FOR PROVISION OF LEAVE ENCASHMENT WERE SHOWN DURING THE COURSE OF ASSESSMENT AND THERE WAS NO MISTAKE APPARENT ON THE FACE OF RECORD IN THIS RESPECT. HE FURTHER SUBMITTED THAT IT IS A DEBATABLE ISSUE WHICH CANNOT BE SUBJECTED TO RECTIFICATION U/S 154 OF THE ACT. HE PLACED ON RECORD ORDER OF THE HONBLE JURISDICTIONAL HIGH COU RT IN THE CASE OF UNIVERSAL MEDICARE (P) LTD., 324 ITR 263, WHEREIN T HE HONBLE HIGH COURT HAS ACCEPTED SUBSTANTIAL QUESTION OF LAW ON T HE ISSUE OF LEAVE ENCASHMENT AS UNDER: 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE ITAT IN LAW IS RIGHT IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE AMOUNT OF PROVISION FOR LEAVE ENCASHMENT WITHOUT APPRECIATING THE FACT THAT THE DISALLOWANCE WAS MADE A S THERE WAS NO PROOF OF PAYMENT FURNISHED TO THE EFFECT THA T THE SAME WAS PAID BEFORE THE DUE DATE OF FILING THE RETURN UND ER SECTION 139(1) OF THE INCOME-TAX ACT. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOU ND FROM RECORD THAT ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) V IDE ORDER DATED 24.01.2014. THEREAFTER PROVISION MADE FOR LEAVE EN CASHMENT OF RS. 5,68,304/- WAS DISALLOWED U/S 154 OF THE ACT. THE ASSESSEE HAD CLAIMED DEDUCTION ON ACCOUNT OF PROVISION FOR LEAVE ENCASHMENT RELYING UPON THE DECISION OF THE HONBLE CALCUTTA H IGH COURT IN THE CASE OF EXIDE INDUSTRIES LTD. 292 ITR 470, WHEREIN THE HONBLE COURT STRUCK DOWN THE PROVISIONS OF SECTION 43B(F), HOLDI NG THE SAME AS ARBITRARY IN NATURE, UNCONSCIONABLE AND DE HORS THE APEX COURTS DECISION IN THE CASE OF BHARAT EARTH MOVERS 245 ITR 428. IT WAS NOT A MISTAKE APPARENT FROM RECORD AND FURTHER THE ISSUE IN DISPUTE IS STILL PENDING FOR ADJUDICATION BEFORE THE HONBLE APEX COU RT AND HENCE IT IS ITA NO. 5055/DEL/2016 3 NOT A CASE FALLING WITHIN THE PURVIEW OF SECTION 15 4 OF THE ACT, IN VIEW OF VARIOUS JUDICIAL PRONOUNCEMENTS. IT IS WELL SET TLED PROPOSITION OF LAW THAT DEBATABLE ISSUE AND THE ISSUE REQUIRING LONG D ELIBERATION CANNOT BE SUBJECTED TO RECTIFICATION U/S 154 OF THE ACT. 5. SIMILAR VIEW HAS ALSO BEEN ACCEPTED BY THE HONB LE BOMBAY HIGH COURT AS SUBSTANTIAL QUESTION OF LAW, THEREFOR E, THE SAME CANNOT BE RECTIFIED U/S 154 OF THE ACT. 6. ACCORDINGLY, WE SET ASIDE THE ORDER OF LOWER AUT HORITIES ON THIS ISSUE, PASSED U/S 154 OF THE INCOME TAX ACT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.12.2017 SD/- SD/- (N.K. SAINI) (K. NARSIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 22.12.2017 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI