Bharat Earth Movers v. CIT

The New India Assurance Co. Ltd, Mumbai vs. Deputy Commissioner of Income Tax, Circle 3(2)(2), Mumbai

Accordingly, Ground No.1 to 4 raised by the Assessee are allowed

Bench: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

…c or contingent liability. Hence the same would not fall under clause (c) of Explanation 1 to section 115JB(2) of the Act also under the category of unascertained liability. We find that the Hon'ble Supreme Court in the case of Bharat Earth Movers reported in 245 ITR 428 (SC) has held that the provision for leave encashment based on actuarial valuation is allowed although the liability may have to be quantified and discharged at a future date. The fact that it is capable of being estimated with reasonable certainty although actual quantification may not be possible and such liability cannot be a contingent one. T…

DCIT 2(3)(2), Mumbai vs. Icici Bank Ltd, Mumbai

In the result, ground no. 3 of appeal of

Bench: Shri Pawan Singh & Shri Girish Agrawal(Physical Hearing) Icici Bank Limited, Dcit, 2(3)(2), Mumbai, Icici Bank Towers, North East Wing, Vs Aayakarbhavan, 1St Floor, Bandrakurla Complex, Mumbai – 400020. Bandra (East), Mumbai – 400051. [Pan No. Aaaci1195H] Appellant / Assessee Respondent / Revenue (Physical Hearing) Dcit, 2(3)(2), Mumbai, Icici Bank Limited Aayakar Bhavan, Vs Icici Bank Towers, North East Wing, 1St Floor, Bandrakurla Complex, Mumbai – 400020. Bandra (East), Mumbai – 400051. [Pan No. Aaaci1195H] Appellant / Assessee Respondent / Revenue

…at future days. It should be capable of being estimated with reasonable certainty though actual quantification may not be possible. If such requirement is satisfied, the liability is not a contingent as has been held by Supreme Court in Bharat Earth Movers 245 ITR 428. On non deduction of tax, the ld. AR submits that exact amount payable was not determinable so no TDS could have been deducted. Similar relief was allowed to the assessee in A.Y. 2008-09 in ITA No. 4249/M/2014. 45. We have considered the rival submissions of both the parties and gone through the orders of lower authorities. We find merit on t…

Icici Bank Ltd, Mumbai vs. DCIT 2(3)(2), Mumbai

In the result, ground no. 3 of appeal of

Bench: Shri Pawan Singh & Shri Girish Agrawal(Physical Hearing) Icici Bank Limited, Dcit, 2(3)(2), Mumbai, Icici Bank Towers, North East Wing, Vs Aayakarbhavan, 1St Floor, Bandrakurla Complex, Mumbai – 400020. Bandra (East), Mumbai – 400051. [Pan No. Aaaci1195H] Appellant / Assessee Respondent / Revenue (Physical Hearing) Dcit, 2(3)(2), Mumbai, Icici Bank Limited Aayakar Bhavan, Vs Icici Bank Towers, North East Wing, 1St Floor, Bandrakurla Complex, Mumbai – 400020. Bandra (East), Mumbai – 400051. [Pan No. Aaaci1195H] Appellant / Assessee Respondent / Revenue

…at future days. It should be capable of being estimated with reasonable certainty though actual quantification may not be possible. If such requirement is satisfied, the liability is not a contingent as has been held by Supreme Court in Bharat Earth Movers 245 ITR 428. On non deduction of tax, the ld. AR submits that exact amount payable was not determinable so no TDS could have been deducted. Similar relief was allowed to the assessee in A.Y. 2008-09 in ITA No. 4249/M/2014. 45. We have considered the rival submissions of both the parties and gone through the orders of lower authorities. We find merit on t…

Dy..C.I.T., Bangalore vs. M/S State Bank of Mysore, Bangalore

Bench: Justice (Retd.) C V Bhadang & Ms Padmavathy S, Am

…termined based on reasonable State Bank of India (erstwhile State Bank of Mysore prior to merger) certainty and hence, clearly allowable. Reliance in this regard is placed on the decision of the Supreme Court in the case of Bharat Earth Movers Vs. CIT [2000] 245 ITR 428 (SC), wherein it is held that the liability is not a contingent one if the liability has been incurred during the accounting year and an estimate with reasonable certainty can be made, even if the liability is to be discharged at a future date. We accordingly, dismiss this issue of revenue’s appeal.” 24. The ld. DR on other hand submitted that th…

State Bank of Mysore, Bangalore vs. JCIT, Bangalore

Bench: Justice (Retd.) C V Bhadang & Ms Padmavathy S, Am

…termined based on reasonable State Bank of India (erstwhile State Bank of Mysore prior to merger) certainty and hence, clearly allowable. Reliance in this regard is placed on the decision of the Supreme Court in the case of Bharat Earth Movers Vs. CIT [2000] 245 ITR 428 (SC), wherein it is held that the liability is not a contingent one if the liability has been incurred during the accounting year and an estimate with reasonable certainty can be made, even if the liability is to be discharged at a future date. We accordingly, dismiss this issue of revenue’s appeal.” 24. The ld. DR on other hand submitted that th…

M/S. Patanjali Foods Ltd (Formerly Known As Ruchi Soya Industries Ltd), Mumbai vs. Dy Comm of Income Tax- Central Circle-7(2), Mumbai

In the result the appeal filed by the revenue stands

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

…as the entering into the contract and undertaking of an obligation to meet the liability, and only consequential effect of the same is to be determined, then, the liability is not a contingent liability (Woodward Governor 312 ITR 254 (SC) &Bharat Earth Movers 245 ITR 428 (SC) followed, Principles of law on accrual of income & loss summarized); (iv) Perfect Circle India Ltd vs DCIT (2015) 60 Taxmann.com 424 (Mum.- Trib.) wherein, while deciding the issue of disallowance of foreign exchange loss on account of marked to market of forex derivative contracts, held by the A.O. as notional loss and by the CIT(A) as spec…

Patanjali Foods Ltd (Formerly Known As Ruchi Soya Industries Ltd), Mumbai vs. Dy Comm of Income Tax-Central Circle-7(2), Mumbai

In the result the appeal filed by the revenue stands

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

…as the entering into the contract and undertaking of an obligation to meet the liability, and only consequential effect of the same is to be determined, then, the liability is not a contingent liability (Woodward Governor 312 ITR 254 (SC) &Bharat Earth Movers 245 ITR 428 (SC) followed, Principles of law on accrual of income & loss summarized); (iv) Perfect Circle India Ltd vs DCIT (2015) 60 Taxmann.com 424 (Mum.- Trib.) wherein, while deciding the issue of disallowance of foreign exchange loss on account of marked to market of forex derivative contracts, held by the A.O. as notional loss and by the CIT(A) as spe…

DCIT, CC-7(2), Mumbai vs. M/S. Patanjali Foods Ltd., ( Formerly Known As Ruchi Soya Industries Ltd, Mumbai

In the result the appeal filed by the revenue stands dismissed

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

…as the entering into the contract and undertaking of an obligation to meet the liability, and only consequential effect of the same is to be determined, then, the liability is not a contingent liability (Woodward Governor 312 ITR 254 (SC) &Bharat Earth Movers 245 ITR 428 (SC) followed, Principles of law on accrual of income & loss summarized); (iv) Perfect Circle India Ltd vs DCIT (2015) 60 Taxmann.com 424 (Mum.- Trib.) wherein, while deciding the issue of disallowance of foreign exchange loss on account of marked to market of forex derivative contracts, held by the A.O. as notional loss and by the CIT(A) as spec…

DCIT, CC-7(2), Mumbai vs. M/S. Patanjali Foods Ltd., ( Formerly Known As Ruchi Soya Industries Ltd, Mumbai

In the result the appeal filed by the revenue stands dismissed

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

…as the entering into the contract and undertaking of an obligation to meet the liability, and only consequential effect of the same is to be determined, then, the liability is not a contingent liability (Woodward Governor 312 ITR 254 (SC) &Bharat Earth Movers 245 ITR 428 (SC) followed, Principles of law on accrual of income & loss summarized); (iv) Perfect Circle India Ltd vs DCIT (2015) 60 Taxmann.com 424 (Mum.- Trib.) wherein, while deciding the issue of disallowance of foreign exchange loss on account of marked to market of forex derivative contracts, held by the A.O. as notional loss and by the CIT(A) as spec…

Credit Guarantee Fund Trust for Micro and Small Enterprises, Mumbai vs. Deputy Commissioner of Income Tax Exemption -1(1), Mumbai

In the result, the appeal of the assessee is allowed

Bench: Shri Vikram Singh Yadav & Shri Rahul Chaudharyassessment Year : 2018-19 Credit Guarantee Fund Trust Deputy Commissioner Of For Micro & Small Enterprises, Income Tax, Exemption-1(1), 1St Floor, Vs. Mtnl Tel. Exch. Building, Sidbi Swavalamban Bhavan, Cumballa Hills, Pedder Road, Avenue 3, Lane 2, G-Block, Mumbai-400026. Bandra Kurla Complex, Bandra (East), Mumbai-400051. Pan : Aaatc2613D (Appellant) (Respondent) For Assessee : Shri Shailesh Shah & Shri Jay Dharod For Revenue : Shri R.A. Dhyani, Cit-Dr Date Of Hearing : 04-09-2025 Date Of Pronouncement : 15-09-2025 O R D E R Per Vikram Singh Yadav, A.M : This Is An Appeal Filed By The Assessee Against The Order Of The Learned Commissioner Of Income Tax (Appeals)-National Faceless Appeal Centre (Nfac), Delhi [„Ld.Cit(A)‟], Pertaining To Assessment Year (Ay) 2018-19, Wherein The Assessee Has Taken The Following Grounds Of Appeal: “(1) On The Facts & Circumstances Of The Case & In Law, The Learned Commissioner Of Income Tax (Appeals) [Ld. Cit(A)], Nfac Has Erred In Confirming The Order Of Levying Penalty U/S 270A Of The Act Of Rs. 293,63,60,258/- On 2 Disallowances Made In The Assessment Order Passed U/S 143(3) R.W.S 144B Of The Act Without Appreciating The Fact That The Hon'Ble Itat, Mumbai Has Fully Deleted The Said Disallowances & Reasons Assigned By Him For Doing So Are Wrong & Contrary To The Facts & Circumstances Of The Case, Provisions Of The Act & Income Tax Rules, 1962 ("The Rules") Made Thereunder. The Appellant Prays That The Penalty U/S 270A Of The Act Of Rs. 293,63,60,258/- Be Deleted. The Appellant Craves Leave To Add, Amend, Alter, Modify And/Or Delete All Or Any Of The Above Grounds Of Appeal, On Or Before The Date Of Hearing.”

…. 28. Hon’ble Supreme Court of India in case of Rotrock Control India Pvt. Ltd. vs. CIT 314 ITR 62 held provision on account of warranty in respect of product sold by the assessee as legitimate deduction. Hon’ble Supreme Court of India in case of Parth Movers 245 ITR 428 (SC) has also decided the issue at hand by returning following findings: “Held, reversing the decision of the High Court, that the provision made by the assessee company for meeting the liability incurred by it under the leave encashment scheme proportionate with the entitlement earned by the emplo yees of the company, inclusive of the officers a…

Navkar Goa Corporation, Mumbai vs. Deputy Commissioner of Income Tax, Central Wing Central Circle

In the result, the appeal by the assessee is partly allowed

Bench: Shri Narendra Kumar Billaiyashri Sandeep Singh Karhailnavkar Goa Corporation, 810 Raheja Centre Free Press Journal Marg Nariman Point, Mumbai-400021. ............... Appellant Pan : Aagfn2313K V/S Deputy Commissioner Of Income Tax, ……………… Respondent Room No. 1923, 19Th Floor, Air India Building Nariman Point, Mumbai – 400021. Assessee By : Shri Aditya Sharma Revenue By : Shri Leyaqat Ali Aafaqui, Sr.Dr

…ars, the assessee also furnished a ledger account, vouchers and bank statements. We find that the said documents also form part of the paper book filed by the assessee before us. 7. The Hon’ble Supreme Court in Bharat Earth Movers vs. CIT, reported in [2000] 245 ITR 428 (SC), observed as follows: – “4. The law is settled: if a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should also be capable of being estimated with rea…