ITAT judgment on 2016-17 appeals: Deduction issue referred back, 14A addition dismissed, post-retirement benefits allowed.

The judgment involved cross appeals by the Revenue and assessee regarding the assessment year 2016-17. The ITAT allowed the assessee's appeal for the issue of deduction to be examined by the Assessing Officer. The Revenue's appeal against the addition under section 14A was dismissed based on Delhi High Court precedents, and the provision for post-retirement medical benefits was allowed following the Supreme Court decision in Bharat Earth Movers vs. CIT. The judgment, pronounced on August 23, 2022, partly allowed the assessee's appeal for statistical purposes and dismissed the Revenue's appeal.

---

---

Issues involved:
The judgment involves cross appeals by the Revenue and assessee against the order of the ld. CIT (Appeals)-9, New Delhi dated 19.09.2019 pertaining to the assessment year 2016-17.

Assessee's Appeal:
The assessee raised grounds challenging the disallowance of provision for leave salary and the admissibility of a claim for deduction of Rs. 130.95 crore. The ITAT held that the issue of deduction was to be examined by the Assessing Officer as the claim was not made before the AO or considered by the CIT(A), and thus, the issue was restored to the file of the AO for fresh adjudication.

Revenue's Appeal:
The Revenue appealed against the deletion of an addition made under section 14A of the Income-tax Act, 1961 and the disallowance of provision for post-retirement medical benefits. The ITAT upheld the decision of the CIT(A) in deleting the addition under section 14A based on precedents of the Hon'ble Delhi High Court. Regarding the provision for post-retirement medical benefits, the ITAT affirmed the CIT(A)'s decision to allow the deduction based on the mandatory nature of the provision in the company's books of accounts and the actuarial valuation, in line with the decision of the Hon'ble Supreme Court in Bharat Earth Movers vs. CIT.

The judgment pronounced on August 23, 2022, partly allowed the assessee's appeal for statistical purposes and dismissed the Revenue's appeal.

---