THE ADDL. COMMISSIONER OF vs. M/S KRISHNA GRAMEEN BANK

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ITA/6006/2012HC KarnatakaKAHC03005063201217 November 2021Bench: R.DEVDAS,RAJENDRA BADAMIKAR4 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the appeal, holding that the issue is covered by the Supreme Court's decision in Union of India vs. M/s. Exide Industries Limited. The deduction for privilege leave encashment is to be allowed in the year of payment.

What were the facts?

The Revenue appealed against the ITAT's order allowing deduction for provision for privilege leave encashment. The ITAT had held it as not a contingent liability and that Section 43B(f) was struck down.

What were the issues?

Whether the provision for privilege leave encashment is a deductible expense and the applicability of Section 43B(f) in light of Supreme Court orders.

Which sections of the Income-tax Act were involved?

Section 43B

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA KALABURAGI BENCH DATED THIS THE 17TH DAY OF NOVEMBER 2021 PRESENT THE HON’BLE MR.JUSTICE R. DEVDAS AND THE HON’BLE MR.JUSTICE RAJENDRA BADAMIKAR I.T.A. No.6006/2012 BETWEEN: THE ADDL. COMMISSIONER OF INCOME TAX, GULBARGA RANGE GULBARGA-585102 ...APPELLANT (BY SRI. AMEET KUMAR DESHPANDE, ADVOCATE) AND: M/S KRISHNA GRAMEEN BANK HEAD OFFICE: KHUSNOOR ROAD, GULBARGA-585102 …RESPONDENT (BY SRI. A. SHANKAR, SENIOR COUNSEL FOR SRI.S.ANNAMALAI AND SRI M.LAVA, ADVOCATES) THIS ITA IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, 1961, PRAYING TO ALLOW THIS APPEAL AND TO SET ASIDE THE ORDER DATED 15.06.2012

2 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH-B, IN I.T.A.NO.146/BANG/2011, SETTING ASIDE THE ORDER DATED 23.12.2010 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) HUBLI, IN I.T.A.NO.246/HBL/CIT(A)/09-10, AND TO GRANT ANY OTHER APPROPRIATE RELIEF. THIS APPEAL COMING ON FOR FINAL HEARING, THIS DAY, R.DEVDAS J., DELIVERED THE FOLLOWING: JUDGMENT R. DEVDAS J., (ORAL):

The substantial questions of law that arise for decision making in this appeal are: 1. Whether the Tribunal is justified in allowing the deduction of the provision for privilege leave encashment holding it as not being a contingent liability? 2. Whether the Tribunal is justified in holding that Section 43B (f) for the Income Tax Act is struck down, inspite of the interim order passed by Hon’ble Supreme Court in SLP (C) 22889/2008?

2.

Learned Senior Counsel Sri A. Shankar, appearing for the respondent-Assessee fairly submits that the issue is now covered by a decision of the Hon’ble Supreme Court of India in the case of Union of India vs. M/s. Exide Industries Limited, which was decided on 24.04.2020, in favour of the Revenue.

3.

In that view of the matter, the appeal filed by the Revenue succeeds and the substantial questions of law are answered in favour of the Revenue. Accordingly, the appeal is allowed. Consequently, the impugned order dated 15.06.2012 passed by the Income Tax Appellate Tribunal, Bengaluru Bench-B in ITA No.146/Bang/2011 is hereby set aside, while further setting aside the order dated 23.12.2010 passed by the Commissioner of Income Tax (Appeals) Hubli, in ITA No.246/HBL/CIT(A)/09-10.

Needless to observe that the allowance will be granted in the year of payment. Sd/- JUDGE Sd/- JUDGE sdu

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