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Facts
The assessee, Universal Cables Limited, filed its return for AY 2017-18, which was assessed under Section 143(3) of the Income Tax Act. The assessee sought deduction of ₹ 44,51,267/- for leave encashment paid during AY 2017-18, which pertained to provisions made in earlier assessment years (2002-03, 2003-04, 2004-05) and had been disallowed at that time. The Ld. CIT(A) denied this claim, refusing to admit it as an additional ground, citing the Goetze (India) Ltd. decision.
Held
The Tribunal held that the payment of ₹ 44,51,267/- for leave encashment in AY 2017-18 is allowable under Section 43B(f) of the Act, irrespective of when the provision was made. It clarified that appellate authorities, unlike Assessing Officers, have the power to admit additional grounds, citing the decisions in Goetze (India) Ltd. and Jai Parabolic Springs Limited. The AO was directed to allow the deduction upon verification of payment evidence.
Key Issues
Whether a claim for deduction of leave encashment, disallowed in earlier years on an accrual basis but actually paid in the current year, can be allowed under Section 43B(f) as an additional ground before the appellate authority.
Sections Cited
250, 143(3), 43B(f), 119(2)
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Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA
Before: SHRI DUVVURU RL REDDY(KZ) & SHRI RAKESH MISHRA
order
: 12-June-2025 ORDER
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the ADDL/JCIT(A)- Prayagraj [hereinafter referred to as Ld. ‘Addl/JCIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2017-18 dated 14.11.2024, which has been passed against the assessment order u/s 143(3) of the Act, dated 10.12.2019.