TANFAC INDUSTREIS LIMITED,CHENNAI vs. ACIT CORPORATE CIRCLE 3(1), CHENNAI

The assessee filed this appeal against the order of the learned Commissioner of Income Tax (Appeals)-11, Chennai in 19 dated 18.02.2019 for the assessment year 2016-17.

In the assessment made for the assessment year 2016-17, the Ld.AO disallowed the assessee’s claim of leave encashment holding that it is only a provision U/s.43B(f) of the Income Tax Act, 1961 (in short ‘the Act’). Aggrieved, the assessee filed an appeal before the CIT(A). The Ld.CIT(A) relying on the decision of the Hon’ble Calcutta High Court in the case of M/s. Exide Industries Ltd., & ANR., reported in 292 ITR 470, dismissed the appeal. Aggrieved against that order, the assessee filed this appeal.

The Ld.AR pleaded that the appeal may be decided in accordance with the decision of the Hon’ble Supreme Court in the SLP (Civil) Nos.22889/2008 dated 08.05.2009 in the case of CIT & ORS. vs. M/s. Exide Industries Ltd., & ANR.

We heard the rival submissions and gone through the decision of the Hon’ble Apex Court’s referred to supra. The Apex Court held that “pending hearing and final disposal of the Civil Appeal, Department is restrained from recovering penalty and interest which has accrued till date. It is made clear that as far as the outstanding interest demand as of date is concerned, it would be open to the Department to recover that amount in case Civil Appeal of the Department is allowed. We further make it clear that the assessee would, during the pendency of this Civil Appeal , pay tax as if section 43B(f) is on the Book but at the same time it would be entitled to make a claim in its returns."

In the result, the assessee’s appeal is treated as partly allowed for statistical purposes.