K.S.B. PUMP LTD, V. DCIT 3(2),

MA 374/MUM/2009

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4663 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-04-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 1996-1997
• Appeal Filed On: 26-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MAHAPATRA
• Assessee Lawyers: JITENDRA B SANGHAVI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI D.K.AGARWAL, JM & SHRI RAJENDRA SINGH, AM & M.A.NO.374/MUM/2009 - A.Y 1996-97 [ARISING OUT OF I.T.A.NO.6638/MUM/2002] M/S KSB PUMPS LTD., 126,MAKER CHAMBERS III, NARIMAN POINT, MUMBAI 400 021 PAN NO.335-034-CV-8141 VS. DY. COMMISSIONER OF I.T. 3(2), MUMBAI (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI JITENDRA B. SANGHAVI. REVENUE BY : SHRI S.K.MAHAPATRA. O R D E R PER RAJENDRA SINGH, AM: THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY T HE ASSESSEE REQUESTING FOR RECTIFICATION/RECALL OF THE ORDER DA TED 7-5-2008 OF THE TRIBUNAL IN I.T.A.NO.6638/MUM/2002 ON THE GROUND OF SOME APPARENT MISTAKES. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE IN THE ASSESSMENT HAD CLAIMED A SUM OF RS.27,44,285/- AS I NCREMENTAL LIABILITY ON ACCOUNT OF LEAVE ENCASHMENT OF EMPLOYE ES WHICH WAS DISALLOWED BY THE AO. THE ASSESSEE DISPUTED THE DEC ISION OF THE AO AND FILED AMENDED GROUND OF APPEAL BEFORE THE CIT[A ] AS PER WHICH THE ASSESSEE CLAIMED TOTAL DEDUCTION OF RS.1,16,20, 125/- BEING PROVISION FOR LEAVE ENCASHMENT INCLUDING PAST LIABI LITY IN PLACE OF ONLY INCREMENTAL LIABILITY OF RS.27,44,285/-. CIT[A] DE LETED THE ADDITION OF 2 RS.27,44,285/- MADE BY THE AO, BUT DID NOT CONSIDER THE CLAIM OF ADDITIONAL LIABILITY MADE IN THE AMENDED GROUND. IN FURTHER APPEAL, THE TRIBUNAL CONFIRMED THE ORDER OF THE CIT[A], BUT DID NOT ADJUDICATE THE ADDITIONAL CLAIM ON ACCOUNT OF LIABILITY FOR LEAVE ENCASHMENT ON THE GROUND THAT NO SUCH DISALLOWANCE HAD BEEN MADE BY THE AO. AGGRIEVED BY THE SAID DECISION, THE ASSESSEE HAS FI LED THE MISCELLANEOUS APPLICATION REQUESTING FOR RECALL OF THE ORDER SO AS TO CONSIDER THE ADDITIONAL CLAIM FOR WHICH A SPECIFIC HAD BEEN RAISED. 3. WE HAVE HEARD BOTH THE PARTIES. THE LD. A.R. FO R THE ASSESSEE ARGUED THAT THE TRIBUNAL HAD OMITTED TO NOTE THAT G ROUND FOR ALLOWANCE OF PAST LIABILITY TOWARDS LEAVE ENCASHMENT WAS MADE FOR THE FIRST TIME BEFORE THE CIT[A] AND, THEREFORE, THE CLAIM COULD NOT FIND PLACE IN THE ORDER OF THE AO. CIT[A] HAD NOT ADJUDICATED THE AD DITIONAL CLAIM OF LIABILITY. THE OBSERVATION OF THE TRIBUNAL THAT CIT [A] HAD ALLOWED THE ASSESSEES GRIEVANCE WAS, THEREFORE, NOT CORRECT. A CCORDINGLY, IT WAS REQUESTED THAT THE ORDER MAY BE RECALLED SO AS TO C ONSIDER THE ADDITIONAL GROUND. THE LD. DR PLACED RELIANCE ON TH E ORDER OF THE TRIBUNAL. 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE M ATTER CAREFULLY. THERE IS NO DISPUTE THAT THE ASSESSEE HA D RAISED A GROUND MAKING CLAIM OF RS.1,16,20,125/- BEING THE PROVISIO N FOR LEAVE ENCASHMENT OF EMPLOYEES INCLUDING THE PAST LIABILIT Y AS AGAINST THE CLAIM OF RS.27,44,285/- BEING ONLY THE INCREMENTAL LIABILITY, IN VIEW OF JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF BH ARAT EARTH MOVERS 3 LTD. [245 ITR 428]. CIT[A] HAD NOT ADJUDICATED THE CLAIM OF ADDITIONAL LIABILITY. THE SPECIFIC GROUND REGARDING THE ENTIRE LIABILITY WAS ALSO RAISED BEFORE THE TRIBUNAL. THE TRIBUNAL HOWEVER DI D NOT ADJUDICATE THE CLAM OF ADDITIONAL LIABILITY. IT IS A SETTLED L EGAL POSITION THAT CIT[A] HAS PLENARY POWERS WHILE DEALING WITH AN APPEAL AND , THEREFORE, HE IS EMPOWERED TO CONSIDER THE CLAIM NOT MADE BEFORE THE AO. THE CIT[A] HOWEVER OMITTED TO DEAL WITH THE CLAIM. THE CLAIM F OR ADDITIONAL LIABILITY HAD ALSO BEEN MADE BEFORE THE TRIBUNAL WH ICH HAD NOT BEEN ADJUDICATED. IN OUR VIEW, THE TRIBUNAL WAS REQUIRED TO ADJUDICATE THE ENTIRE CLAIM FOR WHICH THE SPECIFIC GROUND HAD BEEN RAISED. THEREFORE, THERE IS AN APPARENT MISTAKE IN THE ORDER OF THE TR IBUNAL. WE, ACCORDINGLY, RECALL THE ORDER FOR THE LIMITED PURPO SE OF ADJUDICATING THE CLAIM OF THE ENTIRE PROVISION OF LEAVE ENCASHMENT I NCLUDING THE PAST LIABILITY IN ACCORDANCE WITH LAW AND AFTER ALLOWING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. IN THE RESULT, MISCELLANEOUS APPLICATION IS ALLO WED. ORDER PRONOUNCED ON THIS 22 ND DAY OF APRIL, 2010. SD/- SD/- (D.K.AGARWAL) (RAJENDRA SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 22 ND APRIL, 2010. P/-* 4