M/S SCHENCK PROCESS INDIA LTD.,KOLKATA vs. A.C.I.T.,CIRCLE-12(2), KOLKATA

Ground nos. 1 and 2 read as under:- 1. That in the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) [hereinafter referred to as Ld. CIT(A)] erred in upholding the action of Ld. Assistant Commissioner of Income Tax [hereinafter referred to as Ld. AO] in making disallowance u/s. 43B(f) of the Income Tax Act, 1961 ('Act') amounting to Rs. 5,17,130/-.

Brief facts of the case are that the AO on perusal of the computation of total income noted that the assessee has offered a sum of Rs.7,77,906/- for disallowance u/s. 43B of the Act. However, as per Tax Audit Report (Clause 21(1)(B)/enclosure-10), the total sum disallowable u/s. 43B works out at Rs.16,26,996/-, which included inter-alia non-payment of leave encashment of Rs. 5,17,130/-. In support of the claim, the assessee has relied on the decision of the Hon’ble Calcutta High Court in the case of Exide Industries Ltd Vs. Union of India (U.O.I) (2007) 292 ITR 470 (Cal) and contended that section 43B(f) is ultra-vires the Constitution of India. The AO noted that since revenue’s appeal was pending before the Hon’ble Supreme Court on a Civil Appeal, he (AO) disallowed an amount of Rs. 5,17,130/- and added the same to the total income of the assessee. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A), who was pleased to confirm the same. Aggrieved, the assessee is before us.

Before us the only plea of the assessee is that in the light of the decision rendered by the Hon’ble Supreme Court in the case of CIT Vs. Exide Industries Ltd., which is reported in 116 taxman.com 378 (SC), wherein the Hon’ble Court disagreed with the decision of Hon’ble Calcutta High Court and has upheld the Constitutional validity of section 43B(f) of the Act. Therefore, according to the Learned Authorised Representative ( in short, the Ld. AR) the matter may be remitted back to the AO for deciding the issue (‘Lis’) in the light of the said decision of the Hon’ble Supreme Court in the Exide case (supra).

The Learned Departmental Representative ( in short, the Ld. DR) did not object to the suggestion of remanding the issue back to AO for deciding the matter as per the decision of the Hon’ble Supreme Court in the case Exide Industries (supra). In the light of the aforesaid submissions, we set aside the impugned order of the Ld. CIT(A) and direct the AO to decide the impugned issue of leave encashment claim of Rs. 5,17,130/- in the light of the said decision of the Hon’ble Supreme Court in the Exide case (supra). Needless to say

Ground no. 3 is against the action of the Ld. CIT(A) in disallowing deduction of donation u/s. 80G of the Act amounting to Rs.1,25,000/-.

The AO noted that the assessee has claimed deduction under section 80G of the Act in respect of a sum of Rs. 1,25,000/- which assessee claimed to have paid as donation. Since the assessee did not produce any receipt, (80G certificates) etc. in respect of payment of donation, the claim (Rs. 1,25,000/-) under section 80G of the Act was disallowed.

Aggrieved, the assessee preferred an appeal before the Ld. CIT(A), who noted that the assessee has made donation to Pushpanjali Crossjay Charitable Trust amounting to Rs. 2,50,000/- during the relevant assessment year. According to the Ld. CIT(A), this fact is evident from clause 33 Encl: of TAR (Tax Audit Report) and, therefore, the assessee claimed deduction under section 80G of the Act to the tune of Rs. 1,25,000/-. However, the Ld. CIT(A) noted that the donation receipt was issued on 26-11-2014 vide a cheque issued on 15-07-2013, which according to the Ld. CIT(A) was clearly out of limitation time. According to the Ld. CIT(A) since no bank statement was furnished to prove that cheque was encashed before 31-03-2014/31-03-2013 or within the period allowed by Law for encashment of the cheque, he dismissed this ground of appeal of assessee. Aggrieved, the assessee is before us.

Having heard both the parties. The only plea of assessee is that the AO has disallowed the exemption under section 80G of the Act on the ground that the assessee did not produce any supporting documents. Further the Ld. CIT(A) has confirmed the disallowance since the cheque was dated 15-07-2013 and the receipt was given by the said charitable trust on 26-11-2014, which according to the Ld. CIT(A) was clearly barred by time. Since the assessee could not bring any material to show that the said cheque was encashed, the Ld. CIT(A) did not accept the claim of assessee. According to the Ld. AR, if an opportunity is given to assessee, it is ready to bring evidence on record to show that the assessee, in fact, had given cheque and the payments were in fact, credited in the accounts

In the result, the appeal of assessee is allowed for statistical purpose.