M/s. The Tinplate Company of India Limited. , Kolkata V. DCIT, Cir-1(1), Kolkata. , Kolkata

ITA 944/KOL/2023

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 9779 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Appeal Filed On: 07-09-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 43B; 234B; 250

Judgement Text

आयकर अपीलीय अधिकरण कोलकाता 'सी' पीठ, कोलकाता म ें IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA डॉ. मनीष बोरड, ल े खा सदस्य एवं श्री संजय शमा ा , न्याधयक सदस्य क े समक्ष Before DR. MANISH BORAD, ACCOUNTANT MEMBER & SONJOY SARMA, JUDICIAL MEMBER I.T.A. Nos.: 944 & 945/Kol/2023 Assessment Years: 2016-17 & 2017-18 M/s. The Tinplate Company of India Limited............Appellant [PAN: AABCT 0129 P] Vs. DCIT, Circle-1(1), Kolkata......................................Respondent Appearances: Assessee represented by: Sh. Ketan K. Ved, C.A. & Sh. Alpesh Gupta, C.A. Department represented by: Sh. Rakesh Kumar Das, CIT (D/R). Date of concluding the hearing : November 9 th , 2023 Date of pronouncing the order : November 29 th , 2023 ORDER Per Manish Borad, Accountant Member: Both these appeals filed by the assessee pertaining to the Assessment Years (in short ‘AY’) 2016-17 & 2017-18 are directed against separate orders passed u/s 250 of the Income Tax Act, I.T.A. Nos.: 944 & 945/Kol/2023 AYs: 2016-17 & 2017-18 M/s. The Tinplate Company of India Limited. Page 2 of 5 1961 (in short the ‘Act’) by ld. Commissioner of Income-tax (Appeals)- NFAC, Delhi [in short ld. ‘CIT(A)’] dated 11.07.2023. 2. The assessee is in appeal before the Tribunal raising the following grounds: ITA No. 944/Kol/2023: “1. That on the facts and in circumstances of the case, the NFAC erred in not allowing deduction of Rs. 1,28,28,389 on account of leave encashment actually paid during the year and allowable as per the provisions of section 43B of the Act. 2. That on facts and in circumstances of the case and in law, necessary directions may please be given to the Ld. AO to re-compute the interest under section 234B and 234C of the Act. 3. The Appellant craves leave to add to or alter, by deletion, substitution or otherwise, any or all of the above grounds of objections, at any time before or during the hearing of the Appeal. 4. The Appellant submits that the above grounds are independent and without prejudice to one another.” ITA No. 945/Kol/2023: “1. That on the facts and in circumstances of the case, the NFAC erred in not allowing deduction of Rs. 1,84,27,013 on account of leave encashment actually paid during the year and allowable as per the provisions of section 43B of the Act. 2. That on facts and in circumstances of the case and in law, necessary directions may please be given to the Ld. AO to re-compute the interest under section 234B and 234C of the Act. 3. The Appellant craves leave to add to or alter, by deletion, substitution or otherwise, any or all of the above grounds of objections, at any time before or during the hearing of the Appeal. 4. The Appellant submits that the above grounds are independent and without prejudice to one another.” I.T.A. Nos.: 944 & 945/Kol/2023 AYs: 2016-17 & 2017-18 M/s. The Tinplate Company of India Limited. Page 3 of 5 3. At the outset, ld. Counsel for the assessee referring to the decision of this Tribunal in assessee’s own case for AY 2010-11 in ITA No. 1070/KOL/2018 dated 29.09.2022 submitted that Hon'ble Tribunal considering the ratio laid down by the Hon'ble Supreme Court in the case of Union of India & Ors. Vs. Exide Industries & Ors. reported in [2020] 425 ITR 1 (SC) has held that the provision for leave encashment has to be allowed on payment basis and the Assessing Officer (in short ld. 'AO') is directed to allow the deduction for the payments made after necessary verification. Similar prayer has been made for the years under appeal for AY 2016-17 & AY 2017-18. 4. On the other hand, ld. D/R vehemently argued supporting the orders of both the lower authorities. 5. We have heard rival contentions and perused the records placed before us. We observe that the assessee claimed deduction of leave encashment of Rs. 1,28,28,389/- & Rs. 1,84,27,013/- for AY 2016-17 & AY 2017-18 respectively. The said amount was disallowed by the AO on observing that the assessee claimed this deduction by way of provisions for the leave encashment on the accrual basis but no details of payment of such leave encashment were provided by the tax Auditor in the Tax Audit Report in Column no. 26(i)(B)(b) and thus, the disallowance was made u/s 43B of the Act. Thereafter, ld. CIT(A) has also confirmed the view of the AO referring to the judgment of Hon'ble Jurisdictional High Court in the case of Exide Industries Vs. Union of India reported in [292 ITR 470 (Cal)]. Ld. CIT(A) has however, mentioned in the I.T.A. Nos.: 944 & 945/Kol/2023 AYs: 2016-17 & 2017-18 M/s. The Tinplate Company of India Limited. Page 4 of 5 impugned order that the actual amount paid by the assessee towards leave encashment is allowable but since the assessee did not file any documentary evidences for verification on the said claim, the disallowance made by ld. AO is confirmed. 6. We observe that the assessee claimed the expenditure towards provision for leave encashment at Rs. 3,40,10,000/- & Rs. 4,36,86,000/- for AY 2016-17 & AY 2017-18 respectively. However, it is claimed before us that the actual payment is at Rs. 1,28,28,389/- & 1,84,27,013/- for AY 2016-17 & AY 2017-18 respectively and the deduction should be allowed for the actual payment made during the year. We therefore, considering the ratio laid down by the Hon'ble Apex Court in the case of Exide Industries & Ors. (supra) are inclined to restore the issues raised on merits of the case in ground no. 1 of both the appeals to the file of ld. AO for carrying out necessary verification about the actual payment of leave encashment made by the assessee during the year and the assessee is directed to file all relevant details along with the proof of such payment and place it before the AO. Needless to mention that proper opportunity of being heard should be provided to the assessee to file all these details and if the AO is satisfied about the claim of actual payment of leave encashment for the years under dispute before us then the said claim may be allowed as a deduction in accordance with law. Thus, common ground no. 1 raised for AY 2016-17 & AY 2017-18 are allowed for statistical purposes. I.T.A. Nos.: 944 & 945/Kol/2023 AYs: 2016-17 & 2017-18 M/s. The Tinplate Company of India Limited. Page 5 of 5 7. Other grounds are general in nature which needs no adjudication. 8. In the result, both the appeals filed by the assessee are allowed for statistical purposes. Kolkata, the 29 th November, 2023 Sd/- Sd/- [Sonjoy Sarma] [Manish Borad] Judicial Member Accountant Member Dated: 29.11.2023 Bidhan (P.S.) Copy of the order forwarded to: 1. M/s. The Tinplate Company of India Limited, 2 nd Floor, 4, Bankshall Street, Kolkata-700 001. 2. DCIT, Circle-1(1), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata