THE COMMISSIONER OF INCOME TAX-III vs. SAPIENT CORPORATION PVT LTD

$-1. * IN THE HIGH COURT OF DELHI AT NEW DELHI + CM No. 9159/2013 & ITA 288/2013 THE COMMISSIONER OF INCOME TAX-III Appellant Through Mr. Rohit Madan, Advocate. versus SAPIENT CORPORATION PVT LTD Respondent Through Nemo. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE SANJEEV SACHDEVA ORDER % 23.07.2013 There is delay of 262 days in filing ofthe appeal. It is stated that there was change in counsel resulting in the said substantial delay. However, before issuing notice on the said application, we have deemed it appropriate to examine andconsider the case ofthe appellant on merits, as we find that no ground for issue of notice on merits is made out. 2. The respondent assessee is a company and for the Assessment Year 2004-05 reassessment proceedings were initiated on the ground that Rs.37,31,971/- towards unpaid leave encashment shouldhave been Digitally Signed By:AMULYA Signature Not Verified

disallowed under Section 43B of the Income Tax Act, 1961. Assessment order dated 23'^ September, 2009 was passed.making the said addition after noticing that the respondent-assessee in his reply had mentioned details, but the reply filed by the assessee was unacceptable. No facts have been discussed in the assessment order. 3. The Commissioner of Income Tax (Appeals) noticed that the appellant had filed a letter before the Assessing Officer, stating that they had made payment of Rs.37,26,812/- towards leave encashment during the period relevant to the Assessment year 2004-05. It was also recorded that the opening outstanding balance of unpaid leave encashment was Rs.1,34,65,505/-. Thus, this amount of Rs.37,26,812/- should be allowed as a deduction and the net addition should be Rs.5,159/-. This plea of the assessee has been accepted by the CIT (Appeals) and the tribunal. The said observation and the findings recorded bythe CIT (Appeals) and the tribunal are correct and did not require any interference, once the Revenue has accepted that payment of Rs.37,26,812/- was made and there was an outstanding balance of unpaid leave encashment of more than Rs.l crore in the beginning of the year. In spite of being repeatedly questioned, learned counsel for the appellant-Revenue has not stated that Rs.37,26,812/- was included and was claimed as expenditure in the earlier years. j