BIRLA SUN LIFE ASSET MANAGEMENT CO LTD, MUMBAI V. DCIT 8(1), MUMBAI

ITA 5457/MUM/2013

• Counselvise Citation: 545719914 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 02-06-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 12-08-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: YOGESH KAMAT SR
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.5457/M/2013 ASSESSMENT YEAR: 2010-11 M/S. BIRLA SUN LIFE ASSET MANAGEMENT COMPANY LIMITED, ONE INDIA BILLS CENTRE, TOWER 1, 17 TH FLOOR, JUPITER MILL COMPOUND, 841 SENAPATI BAPAT MARG, ELPHINSTONE ROAD, MUMBAI 400 013 PAN: AAACB 6134D VS. DY. COMM. OF INCOME TAX, RANGE-8(1), ROOM NO.209, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI YOGESH THAR, A.R. REVENUE BY : SHRI YOGESH KAMAT, SR. A.R. DATE OF HEARING : 02.06.2015 DATE OF PRONOUNCEMENT : 30.06.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 20.06.2013 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2010-11. 2. THE SOLE ISSUE RAISED IN THIS APPEAL IS RELATING TO THE DISALLOWANCE ON ACCOUNT OF PROVISION FOR LEAVE ENCASHMENT OF RS.74, 61,261/- UNDER SECTION 43B OF THE INCOME TAX ACT. THE ASSESSEE CLAIMED THAT T HE PROVISION FOR LEAVE ENCASHMENT WAS ASCERTAINED LIABILITY OF THE COMPANY AND THE SAME SHOULD NOT BE CONSTRUED AS THE ITEM COVERED BY SECTION 43B OF THE INCOME TAX ACT IN VIEW OF THE DECISION OF THE HONBLE KOLKATA HIGH CO URT IN THE CASE OF EXIDE ITA NO.5457/M/2013 M/S. BIRLA SUN LIFE ASSET MANAGEMENT COMPANY LIMITED 2 INDUSTRIES LTD. 292 ITR 470. THE AO HOWEVER, HELD THAT THE SAID AMOUNT WAS REMAINED UNPAID AND THEREFORE THE PROVISION FOR LEA VE ENCASHMENT WAS SQUARELY COVERED UNDER THE PROVISIONS OF SECTION 43 B. IN APPEAL, THE LD. CIT(A) ALSO UPHELD THE FINDING OF THE AO. 3. BEFORE US, THE LD. A.R. OF THE ASSESSEE HAS BROU GHT OUR ATTENTION TO THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL D ATED 23.01.2015 IN THE CASE OF AADITYA BIRLA FINANCE LTD. VS. ACIT ITA NO.663 0/M/2010 WHEREIN THE TRIBUNAL, WHILE RELYING UPON VARIOUS OTHER DECISION S OF THE TRIBUNAL AND ADOPTING THE SAME LINE, HAS RESTORED THE MATTER TO THE FILE OF THE AO OBSERVING THAT SINCE THE MATTER IN THE CASE OF EXIDE INDUSTRI ES LTD. (SUPRA) WAS PENDING BEFORE THE HONBLE SUPREME COURT, THE AO TO ADJUDIC ATE THE ISSUE AFRESH IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT AS MAY COME IN THE CASE OF EXIDE INDUSTRIES LTD. (SUPRA). THE RELEVANT PART OF THE DECISION OF THE CO- ORDINATE BENCH IN THE CASE OF AADITYA BIRLA FINANC E LTD. VS. ACIT (SUPRA) FOR THE PURPOSE OF REFERENCE IS REPRODUCED AS UNDER : 4.2 AT THE OUTSET LD. AR OF THE ASSESSEE HAS PRODU CED BEFORE US A COPY OF ORDER OF THE TRIBUNAL IN THE CASE OF THE SISTER CONCERN OF THE ASSESSEE M/S. BIRLA INSURANCE ADVISORY & BROKING SERVICES LTD., IN ITA NO.7531/MUM/2010. THE TRIBUNAL IN THE SAID CASE HAS RESTORED THE MATTER O N THE IDENTICAL ISSUE TO THE FILE OF THE AO WHILE RELYING UPON THE DECISION IN THE CASE OF ESSAR EXPLORATION AND PRODUCTION INDIA LTD. VS. ACIT IN ITA NO.6189/MUM/2 011 ORDER DATED 8/8/2012. THE OPERATING PART OF THE ORDER FOR THE SAKE OF CON VENIENCE IS REPRODUCED AS UNDER: 3. AT THE OUTSET LD. AR OF THE ASSESSEE HAS PRODU CED BEFORE US A COPY OF ORDER OF THE TRIBUNAL DATED 8/8/2012 IN ITA NO.6 189/MUM/2011 IN THE CASE OF ESSAR EXPLORATION & PRODUCTION INDIA LTD. V S. ACIT, ORDER DATED 8/8/2012 , IN WHICH SIMILAR ISSUE CAME UP FOR CONS IDERATION OF ITAT. BEFORE ITAT REFERENCE WAS MADE TO THE AFOREMENTIONED DECI SION IN THE CASE OF M/S. UNIVERSAL MEDICARE PVT. LTD. VS. ACIT(SUPRA), AND AFTER HEARING BOTH THE PARTIES AND CONSIDERING THE ISSUE THAT IN ANOTHER MATTER IN THE CASE OF EXIDE INDUSTRIES LTD. VS. UNION OF INDIA, 292 ITR 470 (CA L), WHERE PROVISIONS OF SECTION 43B(F) WERE HELD TO BE ARBITRARY AND IN S PECIAL LEAVE PETITION BEFORE HONBLE APEX COURT VIDE ORDER DATED 8/9/2 008 THE JUDGMENT OF HONBLE CULCUTTA HIGH HAS BEEN STAYED AND ALSO T HE FACT THAT HONBLE BOMBAY HIGH COURT HAS ADMITTED THE ISSUE IN CONSIDE RATION IN THE APPEAL ITA NO.5457/M/2013 M/S. BIRLA SUN LIFE ASSET MANAGEMENT COMPANY LIMITED 3 FILED BY THE DEPARTMENT IN THE CASE OF M/S. UNIVERS AL MEDICARE PVT. LTD.(SUPRA), THE MATTER WAS RESTORED BACK TO THE FI LE OF AO WITH THE FOLLOWING OBSERVATIONS: 7. WE OBSERVE THAT MUMBAI TRIBUNAL BY ITS ORDER DA TED 30.3.2009 IN THE CASE OF UNIVERSAL MEDICARE PVT LTD. (SUPRA) ALL OWED THE CLAIM OF PROVISION FOR LEAVE ENCASHMENT ON THE BASIS OF DECI SION OF HONBLE APEX COURT IN THE CASE OF BHARAT EARTH MOVERS (SUPR A) AS THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF EXIDE INDUSTRIES (SUPRA) STRUCK DOWN THE PROVISION OF SECTION 43B(F) BEING ARBITRAR Y, UNCONSCIONABLE. FURTHER, THE DEPARTMENT FILED SLP BEFORE HONBLE AP EX COURT AGAINST THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF EXIDE INDUSTRIES LTD (SUPRA) BY ITS ORDER DATED 8.9.2008 IN SLP NO.12060/2008 HAS STAYED THE OPERATION OF JUDGMENT OF HONBLE CALCUTTA HIGH COURT. FURTHER, IT IS ALSO A FACT THA T HONBLE BOMBAY HIGH COURT HAS ADMITTED THE ISSUE UNDER CONSIDERATI ON IN THE APPEAL FILED BY DEPARTMENT IN THE CASE OF UNIVERSAL MEDICA RE PVT LTD (SUPRA). AT THE TIME OF HEARING, ID A.R. SUBMITTED THAT THE SAID APPEAL IS YET TO BE DISPOSED OF. WE ALSO OBSERVE THAT ITAT KOLKATA BENCH BY ITS ORDER DATED 30.1.2012 CONSIDERED THE SAID ISSUE AND BY FOLLOWING EARLIER DECISION ON IDENTICAL ISSUE IN THE CASE ERN ST & YOUNG PVT LTD. (SUPRA) HAS RESTORED THE MATTER TO THE FILE OF AC W ITH A DIRECTION TO ADJUDICATE THE SAME AS PER DECISION OF HONBLE APEX COURT IN THE CASE OF EXIDE INDUSTRIES LTD (SUPRA), IN VIEW OF AB OVE AND RESPECTFULLY FOLLOWING THE EARLIER DECISIONS (SUPRA), WE SET ASI DE THE ORDERS OF AUTHORITIES BELOW AND RESTORE THE MATTER BACK TO TH E FILE OF AO FOR ADJUDICATION AFRESH AS PER THE DECISION OF HONBLE APEX COURT IN THE CASE OF EXIDE INDUSTRIES LTD (SUPRA). 3.1 REFERRING TO THE ABOVE OBSERVATION IT WAS PLEAD ED BY LD. A.R THAT THE MATTER MAY BE RESTORED BACK TO THE FILE OF AO WITH SIMILAR DIRECTIONS. 4. LD. D.R DID NOT HAVE ANY OBJECTION TO SUCH REQU EST OF LD. A.R. 5. IN THIS VIEW OF THE SITUATION, AFTER HEARING BOT H THE PARTIES, RESPECTFULLY FOLLOWING SUBSEQUENT DECISION OF THE T RIBUNAL ON THIS ISSUE IN THE CASE OF ESSAR EXPLORATION & PRODUCTION INDIA LTD.,(SUPRA), WE RESTORE THIS ISSUE TO THE FILE OF A.O WITH SIMIL AR DIRECTIONS. THE RELEVANT OBSERVATIONS HAVE ALREADY BEEN REPRODUCED. WE DIRECT ACCORDINGLY. 4.3 THE LD. REPRESENTATIVES OF THE PARTIES SUBMIT TED THAT THEY HAVE NO OBJECTION IF THE MATTER IN THIS CASE ALSO BE RESTO RED TO THE FILE OF AO WITH A DIRECTION TO DECIDE THE SAME IN THE LIGHT OF ABOVE REPRODUCED DIRECTIONS. THIS ISSUE ITA NO.5457/M/2013 M/S. BIRLA SUN LIFE ASSET MANAGEMENT COMPANY LIMITED 4 IS ACCORDINGLY RESTORED TO THE FILE OF AO TO DECI DE THE SAME AS PER THE DIRECTIONS GIVEN IN THE CASE OF SISTER CONCERN OF THE ASSESSEE AS REPRODUCED ABOVE. 4. THE LD. A.R., THEREFORE, WHILE ALSO RELYING UPON VARIOUS OTHER DECISIONS OF THE TRIBUNAL WHEREIN THE MATTER IS RESTORED TO T HE FILE OF THE AO WITH THE DIRECTION TO DECIDE THE SAME AS PER THE PROPOSITION OF LAW THAT MAY BE LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF E XIDE INDUSTRIES LTD. (SUPRA) HAS STRESSED THAT THE MATTER IN THIS CASE B E ACCORDINGLY RESTORED TO THE FILE OF THE AO. 5. THE LD. D.R. HAS ALSO NOT RAISED ANY OBJECTION A GAINST RESTORATION OF MATTER TO THE AO. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS CORRECT THAT THE DECISION OF THE HONBLE KOLKATA HIGH COURT IN THE CASE OF E XIDE INDUSTRIES LTD. (SUPRA) HAS BEEN STAYED BY THE HONBLE SUPREME COUR T VIDE ORDER DATED 08.09.08 PASSED IN SLP TO APPEAL (CIVIL) CC 12060/ 2008 WHEREIN THE HONBLE SUPREME COURT HAS MADE THE FOLLOWING OBSERV ATIONS: UPON HEARING COUNSEL THE COURT MADE THE FOLLOWING ORDER ISSUE NOTICE. IN THE MEANTIME, THERE SHALL BE STAY OF THE IMPUGNE D JUDGMENT, UNTIL FURTHER ORDER. 7. WE FURTHER FIND THAT THE HONBLE SUPREME COURT V IDE ORDER DATED 08.05.2009, PASSED IN SLP (CIVIL NO.22889/2008) WHI LE GRANTING THE LEAVE TO FILE APPEAL, HAS MADE THE FOLLOWING OBSERVATIONS: ORDER DELAY CONDONED. LEAVE GRANTED. PENDING HEARING AND FINAL DISPOSAL OF THE CIVIL APP EAL, DEPARTMENT IS RESTRAINED FROM RECOVERING PENALTY AND INTEREST WHICH HAS ACCR UED TILL DATE. IT IS MADE CLEAR ITA NO.5457/M/2013 M/S. BIRLA SUN LIFE ASSET MANAGEMENT COMPANY LIMITED 5 THAT AS FAR AS THE OUTSTANDING INTEREST DEMAND AS O F DATE IS CONCERNED, IT WOULD BE OPEN TO THE DEPARTMENT TO RECOVER THAT AMOUNT IN CA SE CIVIL APPEAL OF THE DEPARTMENT IS ALLOWED. WE FURTHER MAKE IT CLEAR THAT THE ASSESSEE WOULD, D URING THE PENDENCY OF THIS CIVIL APPEAL, PAY TAX AS IF SECTION 43B(F) IS ON THE STAT UTE BOOK BUT AT THE SAME TIME IT WOULD BE ENTITLED TO MAKE A CLAIM IN ITS RETURNS. 8. A PERUSAL OF THE ABOVE OBSERVATIONS REVEALS THAT WHILE ACCEPTING THE PETITION FOR LEAVE TO FILE THE APPEAL VIDE ORDER DA TED 08.05.2009, THE HONBLE SUPREME COURT HAS DIRECTED THAT PENDING THE HEARING AND DISPOSAL OF THE CIVIL APPEAL, THE DEPARTMENT IS RESTRAINED FROM RECOVERIN G PENALTY AND INTEREST WHICH HAS ACCRUED TILL DATE. IT HAS ALSO BEEN MADE CLEAR THAT IT WOULD BE OPEN TO DEPARTMENT TO RECOVER THE AMOUNT OF OUTSTANDING INTEREST DEMAND IN CASE THE APPEAL OF THE DEPARTMENT IS ALLOWED. IT HAS AL SO BEEN DIRECTED THAT DURING THE PENDENCY OF THE CIVIL APPEAL, THE ASSESSEE WILL PAY TAX AS IF SECTION 43B(F) IS ON STATUTE BOOK BUT AT THE SAME TIME THE ASSESSE E WOULD BE ENTITLED TO MAKE A CLAIM IN THIS RESPECT IN ITS RETURNS. 9. IN VIEW OF THE OBSERVATIONS OF THE HONBLE SUPRE ME COURT, IN OUR VIEW, IT WILL BE PROPER TO DISPOSE OF THIS APPEAL IN THE LIGHT OF THE ORDER OF THE HONBLE SUPREME COURT DATED 08.05.2009 PASSED IN TH E CASE OF CIT VS. EXIDE INDUSTRIES LTD. (SUPRA). WE THEREFORE DISPOSE OF THE PRESENT APPEAL WITH A DIRECTION THAT THE ASSESSEE WILL PAY THE TAX AS IF SECTION 43B(F) IS ON THE STATUTE BOOK, HOWEVER, TILL THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF CIT VS. EXIDE INDUSTRIES LTD. (SUPRA), THE REVENU E WILL NOT RECOVER THE PENALTY AND INTEREST WHICH MAY ACCRUE TILL THE DECI SION OF THE APPEAL BY THE HONBLE SUPREME COURT IN THE CASE OF EXIDE INDUSTR IES LTD. IT WOULD BE OPEN TO THE DEPARTMENT TO RECOVER THE OUTSTANDING I NTEREST DEMAND IN CASE THE CIVIL APPEAL OF THE DEPARTMENT IN THE CASE OF EXID E INDUSTRIES LTD. (SUPRA) IS ALLOWED BY THE HONBLE SUPREME COURT. SUBJECT TO O UR ABOVE OBSERVATIONS, THE MATTER IS RESTORED TO THE FILE OF THE AO TO BE ADJU DICATED AFRESH AS PER THE ITA NO.5457/M/2013 M/S. BIRLA SUN LIFE ASSET MANAGEMENT COMPANY LIMITED 6 DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F EXIDE INDUSTRIES LTD. (SUPRA). 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TH EREFORE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30.06.2015. SD/- SD/- (G.S. PANNU) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 30.06.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.