2018 (9) TMI 276 - AT - Income Tax

Successful Revenue Appeal: Tribunal Upholds Income Additions, Verifies Deduction Claim

ACIT, CIR 42, Murshidabad Versus Bangiya Gramin Vikash Bank

ACIT, CIR 42, Murshidabad Versus Bangiya Gramin Vikash Bank - TMI Issues:1. Proper and adequate enquiry not made by AO in original assessment u/s 143(3).2. Dispute over additions made to total income by AO u/s 143(3)/263.3. Tribunal's decision on provision for wage revision.4. Tribunal's decision on liability of leave encashment.5. Deduction claim for provision for leave encashment.Analysis:1. The appeal was filed by the revenue against the order of Ld. CIT(A) due to the original assessment u/s 143(3) being deemed erroneous and prejudicial to revenue's interest. The Ld. CIT(A) set aside the original order and directed a fresh assessment, resulting in two additions to the total income of the assessee.2. The assessee disputed both additions made by the AO in the fresh assessment u/s 143(3)/263. The Tribunal, in a separate order, upheld the AO's decision on the provision for wage revision, setting aside the Ld. CIT's order u/s 263. Consequently, the Ld. CIT(A) allowed the assessee's appeal on this issue. However, regarding the liability of leave encashment, the Tribunal directed the AO to verify the claim of the assessee for deduction based on payment made before the due date of filing the return.3. The Tribunal held that any sum paid on account of leave encashment before the due date of filing the return should be allowed as a deduction as per the proviso to section 43B(f) of the Act. The Ld. CIT(A) directed the AO to verify the payment made by the assessee and allow the deduction accordingly. The Tribunal's decision was crucial in upholding the Ld. CIT(A)'s order on this issue, dismissing the revenue's appeal.4. The Tribunal's detailed analysis and consideration of the legal provisions regarding the deduction claim for provision for leave encashment showcased a thorough understanding of the applicable laws and regulations. The decision was based on the specific provisions of the Act, ensuring a fair and just outcome for the assessee.5. The judgment highlighted the importance of adhering to legal requirements and deadlines concerning deductions and additions to the total income. The meticulous examination of the facts and legal provisions by the Tribunal and the Ld. CIT(A) ensured a just and equitable resolution of the dispute between the revenue and the assessee.