ACIT, NEW DELHI vs. M/S. LUMAX AUTOMOTIVE SYSTEMS LTD., DELHI

PDF · subscribers
ITA 454/DEL/2016Status: DisposedITAT Delhi30 April 2019AY 2011-123 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the issue was squarely covered in favor of the assessee by its own previous decision for Assessment Year 2009-10. Since the facts for the current year were identical, the CIT(A)'s order deleting the addition was upheld.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting an addition of Rs. 1,05,80,372/-. This addition was on account of retrenchment/retirement compensation claimed as not being an allowable expenditure exclusively for business purposes.

What were the issues?

Whether retrenchment/retirement compensation paid to employees is an allowable business expenditure under Section 37(1) of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 37(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI

Before: SHRI G. D. AGRAWAL & SHRI K.N. CHARY

For Appellant: Ms. Ashima Neb, Sr. DR
Hearing: 29.04.2019Pronounced: 30.04.2019

This is an appeal filed by the Revenue against the order dated 27.11.2015 passed by the CIT(A)-5, Delhi.

2. At the time of hearing before us none appeared on behalf of the assessee neither there is any request for adjournment has been made therefore, we proceeded to hear the appeal ex parte qua the assessee. In this appeal by the Revenue, following grounds have been raised:-

“i. That the order of the learned CIT(A)(Appeals) is erroneous & contrary to facts & law. ii. On the facts and circumstances of the case, the learned CIT(Appeals) has erred in deleting the addition of Rs. 1,05,80,372/- on account of retrenchment/retirement of the employees of the company not being the allowable expenditure u/s 37(1) of the I.T. Act, 1961 as not being exclusively for the purpose of the business.”

2.

We have heard the learned DR and perused the material placed before us.

3.

We find that this issue is squarely covered in favour of the assessee by the decision of ITAT in assessee’s own case for Assessment Year 2009-10 vide ITA No. 1823/Del/2014. That the Assessing Officer himself while disallowing the retrenchment compensation paid has recorded the finding that the facts of the year under appeal are identical to Assessment Years 2009-10 and 2010-11. The relevant portion of his finding reads as under:-

On similar grounds and for similar reasons the claim of the assessee was rejected in the earlier assessment year 2009-10 and also in assessment year 2010-11. The assessee has not been able to justify the change in facts and circumstances of those years when the said claim was not permitted to it, qua the facts and circumstances of the above assessment year 2011-12 and therefore on the same grounds the claim of Rs. 1,05,80,372/- is disallowed and accordingly an addition is being made to the Total Income of the assessee on this account.

4.

In view of above, since the facts of the year under consideration are admitted to be identical to assessment year 2009-10. The decision of ITAT in assessment year 2009-10 would be squarely applicable wherein the ITAT has upheld the order of the CIT(A) wherein he has deleted the disallowance made by the Assessing Officer on account of retrenchment compensation.

5.

Respectfully following the decision of ITAT in assessee’s own case, we upheld the order of CIT(A) and dismissed the appeal filed by the Revenue.

6.

In result, Revenue’s appeal is dismissed.

More judgments on Section 37(1)

All 6,995 judgments and leading authorities on Section 37(1) →

Recent GST High Court judgments

Search GST case law →