TaxTMI 
TaxTMI 
2015 (2) TMI 774
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....the Assessing Officer amounting to Rs.1.52 crores on account of claim made by the assessee towards cost paid to Hindustan Lever Ltd. for salary of Managers, Officers on deputation? B. Whether the Tribunal was justified in law in upholding the order passed by the CIT (Appeals) deleting the addition of Rs.24.30 crores made by the AO on account of a claim for additional payment for earlier years towards short payment of processing charges?" 2. The brief facts are that the assessee who was originally incorporated in 1975, set up a paper plant, started incurring losses and faced winding up proceeding during which rehabilitation proposals were made. Subsequently, at the request of financial inst....
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....essing charges when the latter was managing its affairs in terms of rehabilitation scheme. The AO noted that the company had filed a petition based mainly against HLL demanding these amounts as short-payments on account of processing charges. The AO sought to bring these amounts to tax on the basis that according to the mercantile system the assessee ought to have included these in P & L account. 4. Since the assessee was aggrieved by these additions it approached the CIT, who directed deletion of both the amounts. It was held by the CIT firstly that merely because the liability of 1.52 crores pertained to earlier years its deduction could not have been disallowed. It was observed that this liability has crystallized on account of Board Re....
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....rual of income in the case of appellant. The case would have been entirely different if the appellant would have got a right to receive some additional amount pertaining to earlier years either because of some court order (legal right) or agreed by the other party (contractual right). In that case, by applying the principles of accrual, the amount would have been taxable even though pertaining to earlier years and even if not actually received. But since the appellant has not obtained any right to receive and has simply filed a petition before the court, the addition to its income is not justified. 5.4 There is another reason because of which the addition is not correct. Even without p....
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.... this Court should not interfere with concurrent findings on both the issues. He submitted in addition that the Board took note of the debit note and gave effect to it by admitting a liability since there was no dispute that HLL in fact had claimed that amount. It was also emphasized that the debit note covered current period also i.e. financial year 2002-03. So far as the addition of Rs.24.3 crores was concerned, the learned counsel submitted that both the CIT(Appeals) and the ITAT had noticed that the matter with respect to this liability was sub-judice and pending adjudication in the Company Court which since by its interim judgment dated 25.4.2013 in Company Petition No.5/1985 CA No.714/2006, rejected the plea made on behalf of the orig....
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....It is stated that in the handing over docket, HLL had mentioned that Rs. 81,22,072 was payable to it towards balance part payment of salaries and wages of managers and supervisors on full time deputation to SCL factory. In the circumstances, the above plea of the Applicant is rejected." 8. It is evident from the above discussion that so far as the sum of Rs.1.52 crores is concerned, HLL never appears to have pressed for the arrears of wages and salaries for its employees for the period 1999-2003 to the extent claimed by the assessee on the basis of the debit note. Furthermore, large part of those amounts was in fact time-barred. That the debit note demanded Rs.1.52 crores may be a matter of record. 9. Furthermore, there is no evidence on ....