M/S. KRISHNA GRAMEENA BANK vs. ASST.COMMISSIONER OF INCOME TAX

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ITA/200005/2016HC KarnatakaKAHC03003239201617 November 2021Bench: R.DEVDAS,RAJENDRA BADAMIKAR3 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal confirmed the disallowance of the provision for employee leave encashment. The High Court noted that the issue is covered by the Supreme Court decision in Union of India vs. M/s. Exide Industries Limited, which was in favor of the Revenue.

What were the facts?

The assessee, Krishna Grameena Bank, made a provision for employee leave encashment based on actuarial valuation. The Assessing Officer disallowed this provision by invoking Section 43B(f) of the Income Tax Act.

What were the issues?

Whether the provision for employee leave encashment made on the basis of actuarial valuation is allowable as a deduction under Section 43B(f) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 43B(f)

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.200005/2016 BETWEEN: M/S. KRISHNA GRAMEENA BANK (PRESENTLY PRAGATHI KRISHNA GRAMIN BANK) REP.BY ITS GENERAL MANAGER SRI GOPALA NAIK KUSNOOR ROAD, GULBARGA-585105 PRESENTLY NO.32, SANGANAKAL ROAD, GANDHINAGAR, BALLARI-583103 ...APPELLANT (BY SRI. A. SHANKAR, SENIOR COUNSEL FOR S.ANNAMALAI AND SRI M. LAVA, ADVOCATES) AND: ASST.COMMISSIONER OF INCOME TAX CIRCLE 1,2ND FLOOR, AAYAKAR BHAVAN SEDAM ROAD,

2 GULBARGA-585105 …RESPONDENT (BY SRI. AMEET KUMAR DESHPANDE, ADVOCATE) THIS ITA IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, PRAYING TO A)FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW AS STATED ABOVE AND ANSWER THE SAME IN FAVOR OF THE APPELLANT. B) TO ALLOW THE APPEAL AND SET ASIDE THE FINDINGS, TO THE EXTENT AGAINST THE APPELLANT, IN THE ORDER PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, ‘C’ BENCH, BENGALURU IN ITA.NO.592/BANG/2014 DATED-06.05.2016 RELATING TO ASSESSMENT YEAR 2010-11. THIS APPEAL COMING ON FOR FINAL HEARING, THIS DAY, R.DEVDAS J., DELIVERED THE FOLLOWING: JUDGMENT R. DEVDAS J., (ORAL):

The substantial question of law that arises for decision making in this appeal is whether the Tribunal is justified in law in confirming the disallowance of provision for employee leave encashment of Rs.1,23,20,711/- made on the basis of actuarial valuation by invoking provisions of Section 43B(f) of the Act?

2.

Learned Senior Counsel Sri A. Shankar, appearing for the appellant-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 respondent-Revenue.

3.

In that view of the matter, the appeal filed by the appellant-Assessee stands dismissed.

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

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