MOUNT SHIVALIK INDUSTRIES LTD., Alwar V. ASSISTANT COMMISSIONER OF INCOME TAX, Alwar

ITA 988/JPR/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0242 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 14-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C GUPTA
• Keywords: Assessment record
• Section: 43B; 143(3); 154; 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 988 & 989/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2009-10 & 2010-11 MOUNT SHIVALIK INDUSTRIES LTD. 140 MILE STONE, DELHI JAIPUR HIGHWAY, VILLAGE: GUNTI, BEHROR, DISTRICT: ALWAR. CUKE VS. THE ACIT, CIRCLE-2, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCM 6098 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI ASHISH SHARMA (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI K.C. GUPTA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 04/09/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT :14/09/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THESE ARE TWO APPEALS FILED BY THE ASSESSEE AGAINS T THE ORDERS OF LD. CIT(A), ALWAR DATED 22.09.2017 FOR THE ASSESSME NT YEARS 2009-10 & 2010-11 RESPECTIVELY. IN BOTH THESE APPEALS, THE LI MITED ISSUE REVOLVES AROUND NON- ALLOWANCE OF DEDUCTION OF LEAVE ENCASHM ENT ACTUALLY PAID BY THE ASSESSEE DURING THE FINANCIAL YEAR RELEVANT TO IMPUNGED ASSESSMENT YEARS. 2. THE FACTS OF ASSESSMENT YEAR 2009-10 IN ITA NO. 988/JP/2017 ARE CONSIDERED FOR THE PURPOSES OF PRESENT DISCUSSION. THE ASSESSMENT WAS ITA NO. 988 &989/JP/2017 MOUNT SHIVALIK INDUSTRIES LTD VS. ACIT 2 COMPLETED U/S 143(3) OF THE ACT AND THEREAFTER, THE ASSESSEE MOVED AN APPLICATION U/S 154 OF THE ACT CLAIMING ALLOWANCE F OR LEAVE ENCASHMENT PAYMENT OF RS. 1,28,921/-. THE ASSESSING OFFICER RE JECTED THE APPLICATION OF THE ASSESSEE HOLDING THAT THE ASSESS EE NEITHER REVISED ITS RETURN OF INCOME NOR FILED ANY REVISED COMPUTATION OF INCOME DURING COURSE OF ASSESSMENT PROCEEDING AND THERE IS THUS N O MISTAKE APPARENT FROM THE RECORDS. BEING AGGRIEVED, THE ASSESSEE CAR RIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS CONFIRMED THE ACTION OF THE AO AND NOW THE ASSESSEES IS IN APPEAL BEFORE US. 3. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT THE CLAIM OF LEAVE ENCASHMENT IS IN RESPECT OF OUTSTANDING LI ABILITY AT THE BEGINNING OF THE YEAR WHICH HAS BEEN PAID DURING TH E YEAR AND THE SAME IS EVIDENT FROM THE TAX AUDIT REPORT WHICH FOR MS PART OF THE ASSESSMENT RECORDS. IT WAS SUBMITTED THAT IN TERMS OF PROVISIONS OF SECTION 43B OF THE ACT, THE ASSESSING OFFICER CAN R EJECT THE CLAIM OF DEDUCTIONS WHICH HAVE ACTUALLY NOT BEEN PAID BY THE ASSESSEE AND AT THE SAME TIME, HE HAS TO ALLOW THOSE CLAIMS ACTUALL Y PAID BY THE ASSESSEE. OUR REFERENCE WAS DRAWN TO THE CBDT CIRCU LAR NO. 372 DATED 08.12.1983, CBDT CIRCULAR NO. 669 DATED 25.10.1993 AND CBDT CIRCULAR NO. 14 DATED 11.04.1955 AND RELIANCE WAS ALSO PLACE D ON THE DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS. SHELLY PRODUCTS 261 ITR 367 AND THE DECISION OF HONBLE J & K HIGH COURT IN CASE OF SMT. SNEH LATA JAIN VS. CIT 140 TAXMAN 156. 4. THE LD. DR IS HEARD WHO HAS RELIED ON THE ORDER OF THE LOWER AUTHORITIES AND SUBMITTED THAT THERE IS NO MISTAKE WHICH IS APPARENT ITA NO. 988 &989/JP/2017 MOUNT SHIVALIK INDUSTRIES LTD VS. ACIT 3 FROM THE RECORD, THEREFORE, THE ACTION OF THE LOWER AUTHORITIES SHOULD BE CONFIRMED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON PERUSAL OF THE ASSESSMENT O RDER PASSED U/S 143(3) OF THE ACT, IT IS NOTED THAT THE ASSESSING O FFICER HAS REFERRED TO SCHEDULE V CLAUSE 21(1)(B) OF THE TAX AUDIT REPORT AND HAS DISALLOWED THE AMOUNT OF RS. 7,90,203/- TOWARDS LEAVE ENCASHME NT EXPENSES INCURRED DURING THE YEAR IN ABSENCE OF NECESSARY PR OOF SUBMITTED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING . AT THE SAME TIME, IF WE LOOK AT SCHEDULE IV, CLAUSE 21 (1)(A) O F THE TAX AUDIT REPORT, IT IS REPORTED THEREIN THAT THERE IS AN AMOUNT OF L EAVE ENCASHMENT LIABILITY WHICH IS OUTSTANDING AT THE BEGINNING OF THE FINANCIAL YEAR WHICH HAS NOT BEEN ALLOWED IN ANY OF THE ASSESSMENT FOR A NY PRECEDING YEARS AMOUNTING TO RS. 33,04,006/- AND OUT OF THAT, AN AM OUNT OF RS. 128,921/- HAS BEEN PAID DURING THE FINANCIAL YE AR RELEVANT TO THE IMPUGNED ASSESSMENT YEAR. IT THEREFORE CANNOT BE DI SPUTED THAT WHERE THE ASSESSEE WAS NOT ALLOWED THE DEDUCTION IN THE E ARLIER YEAR AND THE SAME HAS BEEN PAID DURING THE YEAR, THE ASSESSEE IS WELL WITHIN HIS RIGHT TO CLAIM THE SAID EXPENDITURE IN TERMS OF PRO VISIONS OF SECTION 43B OF THE ACT WHICH CLEARLY PROVIDES THAT IRRESPECTIVE OF THE PREVIOUS YEAR IN WHICH THE LIABILITY HAS BEEN INCURRED, THE ASSES SEE SHALL BE ALLOWED THE DEDUCTION IN THE YEAR OF ACTUAL PAYMENT. THE TA X AUDIT REPORT AND THE ACCOMPANYING SCHEDULES ARE CLEARLY ON RECORD AN D THE SAME SHOWS THAT THE AMOUNT OF RS. 128,921/- TOWARDS PRE-EXISTI NG LIABILITY AT THE BEGINNING OF THE YEAR HAS BEEN PAID BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. IN THE RESULT, WE HEREBY DIREC T THE ASSESSING ITA NO. 988 &989/JP/2017 MOUNT SHIVALIK INDUSTRIES LTD VS. ACIT 4 OFFICER TO ALLOW THE SAID CLAIM OF THE ASSESSEE AFT ER VERIFYING THE DOCUMENTATION IN SUPPORT OF THE ACTUAL PAYMENT OF RS. 1,28,921/-. IN THE RESULT THE APPEAL OF THE ASS ESSEE IS ALLOWED. 6. SIMILARLY, IN ITA NO. 989/JP/2017, BOTH THE PAR TIES SUBMITTED THAT THE FACTS AND CIRCUMSTANCES OF THE CASE ARE EX ACTLY IDENTICAL FACTS AND THEREFORE, OUR DIRECTIONS CONTAINED IN ITA NO. 988/JP/2017 SHALL EQUALLY APPLY TO THIS APPEAL AS WELL. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSES SEE ARE ALLOWED WITH ABOVE DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 14/09/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 14/09/2018. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- MOUNT SHIVALIK INDUSTRIES LTD., ALWA R. 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE-2, ALWAR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 988 & 989/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR