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Income Tax Appellate Tribunal, “A” BENCH: KOLKATA
Before: Shri N. V. Vasudevan, JM & Shri M. Balaganesh, AM]
ORDER
Per Shri M. Balaganesh, AM:
This appeal by assessee is arising out of order of CIT(A)-I, Kolkata vide Appeal No. 267/CIT(A)-I/C-1/10-11 dated 03.08.2012. Assessment was framed by DCIT, Circle-1, Kolkata u/s. 143(3) of the Income tax Act, 1961 (hereinafter referred to as the “Act”) for AY 2006-07 vide his order dated 22.12.2009.
The first issue to be decided in this appeal of assessee is as regards to disallowance confirmed by CIT(A) made u/s. 43B(f) of the Act in respect of leave encashment of Rs.1,07,29,182/-.
At the outset, it is noticed that the assessee has claimed Rs.1,07,29,182/-for AY 2006-07 on account provision for leave encashment on accrual basis. Ld. counsel for the assessee stated that the deduction on account of provision of leave encashment was made on the basis of the judgment of Hon'ble jurisdictional High Court in the case of Exide Industries Ltd. Vs. Union of India (2007) 292 ITR 470 (Cal) but he fairly conceded that subsequently Hon'ble Supreme Court has stayed this judgment of Hon'ble jurisdictional High Court vide order 08-05-2009 by following observations:- “Pending hearing and final disposal of the Civil Appeals, 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 Statue Book but at the same time it would be entitled to make a claim in its returns.”
2 Exide Industries Ltd. AY 2006-07 In view of the above, Ld. counsel for the assessee fairly stated that let Hon'ble Supreme Court decide the issue and by that time the matter can be remitted back to the file of AO for fresh adjudication in term of the decision of Hon'ble Supreme Court. On this, Ld. CIT DR has not objected to the same. Accordingly, we set aside this issue to the file of the AO to await the decision of Hon'ble Supreme Court and decide the issue accordingly. This issue of assessee’s appeal is remitted back to the file of AO and allowed for statistical purposes.
The next issue of assessee’s appeal is as regards to the disallowance of expenditure restricted towards earning of exempted income from 2% to 1% u/s. 14A of the Act. For this, assessee has raised following ground no. 2:
2(a) That the Ld. CIT(A) erred in facts as well as in law by restricting the disallowance towards earning of exempted income from 2% to 1% by following the decisions of the jurisdictional Tribunal, when the Mumbai High Court had categorically held that the actual expenses incurred for earning exempted income would only becoming within the ambit of section 14A. b) That the Ld. CIT(A) erred in facts as well as in law in ignoring the fact that the appellant assessee had quantified a sum of Rs.1,23,469/- as actual expenditure incurred on earning exempted income, which was duly verified the tax auditors, thereby confirming the disallowance to an ad hoc 1% of the exempted income.
At the time of hearing Ld. Counsel for the assessee submitted that he has instructions not to press this ground of appeal. Since Ld. CIT, DR has not raised any objection, we dismiss this ground of appeal of assessee as not pressed.
In the result, the appeal of assessee is partly allowed for statistical purposes.
Order is pronounced in the open court on 20.05.2016
Sd/- Sd/- (N. V. Vasudevan) (M. Balaganesh) Judicial Member Accountant Member
Dated : 20th May, 2016 Jd.(Sr.P.S.)
APPELLANT – Exide Industries Ltd., 59E, Chowringhee Road, 1. Kolkatea-700 020 Respondent –Addl. CIT, Range-1, Kolkata. 2 The CIT(A), Kolkata 3. 4. CIT , Kolkata 5. DR, Kolkata Benches, Kolkata