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Income Tax Appellate Tribunal, “C”, BENCH KOLKATA
Before: SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM
आदेश / O R D E R
Per Dr. A.L. Saini, AM:
The captioned appeal filed by the assessee, pertaining to assessment year 2016-17, is directed against the order passed by the Commissioner of Income Tax (Appeal)-2, Kolkata, in appeal no. CIT(A), kolkata-6/10377/18-19, which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 (in short the “Act”) dated 02/07/2018.
M/s S. V. Ghatalia& Associates LLP Assessment Year:2016-17
The grounds of appeal
raised by the assessee are as follows:
1. The learned Commissioner of Income Tax (Appeals)-6 ["CIT(A)" for short] has erred on facts and in law in upholding the disallowance of a sum of Rs. 6,78,020/- being the provision made for leave encashment reversed and credited to P & L a/c in the current assessment year out of provision made for leave encashment in earlier assessment years even though the provision when made in earlier years was not allowed as a deduction and as a result the same amount has been taxed twice.
2. The learned CIT(A) has also erred on facts and in law in confirming the addition of Rs. 6,78,020/- contrary to the expressed provisions of Section 43B(f) of the Act.
3. The learned CIT(A) has also erred on facts and in law in confirming the addition made & thus failing to appreciate that tax has already been paid on Rs. 6,78,020/- in the assessment year in which provision for leave encashment was made. In not deleting the addition made the appellant is not only being taxed twice but is also being made to pay tax on the same amount twice, once in the year in which provision is made & again in the current assessment year when the provision made has been credited in P & L a/c. This is contrary to Supreme Court order in the case of Excide Industries Ltd v UOI.
The order of the learned CIT(A) to the extend indicated above is contrary to the facts, law and the principles of natural justice.
5. The appellant craves leave to add, alter, amend and /or modify any of the grounds of appeal at or before the hearing of the appeal.
The ld. Counsel for the assessee submitted before the Bench that Assessing Officer has not examined the provision for leave encashment credited in the profit and loss account and reimburse in the current year. The assessee made provision in earlier year which partly has reversed in current year and the same aspect has not been examined and adjudicated by the Assessing Officer therefore the matter may be remitted back to the file of Assessing Officer to examine the provision for leave encashment. On the other hand, the ld. D.R. did not have any objection if the matter is remitted back to the file of Assessing Officer.
M/s S. V. Ghatalia& Associates LLP Assessment Year:2016-17 4. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials available on record. We note that assessee made provision for leave encashment in earlier years as well as in the current assessment year under consideration. The assessee also written back the excess provision made in earlier years and Assessing Officer has not examined the same. Therefore, we are of the view that the matter may be remitted back to the file of the Assessing Officer. Ld. D.R. for the revenue did not have any objection if the matter is remitted back to the file of Assessing Officer. We note that the issue involved is in relation to the leave encashment which is covered by the Judgment of Hon’ble Supreme Court in the case of Exide Industries Ltd. vs. UOI in Appeal no. CC22889/2008(SC). Therefore, we direct the Assessing Officer to examine the quantum of provision for leave encashment of current year and the previous year and ascertain the provision for leave encashment for the current year. Thereafter the Assessing Officer should pass order as per outcome of the judgment of Hon’ble Supreme Court in the case of Exide Industries Ltd. (special leave to appeal nos. CC22889/2008 dated 8.5.2009 (SC). For statistical purposes, the appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Court on 20.03.2020