TaxTMI 
TaxTMI 
2017 (7) TMI 65
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....requires re-examination of facts by the ld. Assessing Officer. 2.1. We have considered the rival submissions and perused the material available on record. In view of the above, we are reproducing hereunder the decision of the Coordinate Bench of the Tribunal (ITA No.5457/Mum/2013) order dated 30/06/2015, for ready reference and analysis:- "The present appeal has been preferred by the assessee against the order dated 20.06.2013 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2010-11. 2. The sole issue raised in this appeal is relating to the disallowance on account of provision for leave encashment of Rs. 74,61,261/- under section 43B of the Income Tax Act. The assessee claimed that the provision for leave encashment was ascertained liability of the company and the same should not be construed as the item covered by section 43B of the Income Tax Act in view of the decision of the Hon'ble Kolkata High Court in the case of "Exide Industries Ltd." 292 ITR 470. The AO however, held that the said amount was remained unpaid and therefore the provision for leave encashment was squarely covered under the pr....
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.... case of M/s. Universal Medicare Pvt. Ltd.(supra), the matter was restored back to the file of AO with the following observations: "7. We observe that Mumbai Tribunal by its order dated 30.3.2009 in the case of Universal Medicare Pvt Ltd. (supra) allowed the claim of provision for leave encashment on the basis of decision of Hon'ble apex Court in the case of Bharat Earth Movers (supra) as the Honble Calcutta High Court in the case of Exide Industries (supra) struck down the provision of section 43B(f) being arbitrary, unconscionable. Further, the department filed SLP before Hon'ble apex Court against the decision of Hon'ble Calcutta High Court in the case of Exide Industries Ltd (supra) by its order dated 8.9.2008 in SLP No.12060/2008 has stayed the operation of judgment of Hon'ble Calcutta High Court. Further, it is also a fact that Hon'ble Bombay High Court has admitted the issue under consideration in the appeal filed by department in the case of Universal Medicare Pvt Ltd (supra). At the time of hearing, Id A.R. submitted that the said appeal is yet to be disposed of. We also observe that ITAT Kolkata Bench by its order dated 30.1.2012 considered the said issue and by ....
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....PON hearing counsel the Court made the following ORDER Issue notice. In the meantime, there shall be stay of the impugned judgment, until further order." 7. We further find that the Hon'ble Supreme Court vide order dated 08.05.2009, passed in SLP (Civil No.22889/2008) while granting the leave to file appeal, has made the following observations: "ORDER Delay condoned. Leave granted. Pending hearing and final disposal of the Civil Appeal, 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 Statute Book but at the same time it would be entitled to make a claim in its returns." 8. A perusal of the above observations reveals that while accepting the petition for leave to file the appeal vide order dated 08.05.2009, the Hon'ble Supreme Court has d....
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....vided on account of leave encashment in respect of leave at the credit of employees which were not allowable as not paid before the due date of filing the return of income and disallowed the same as per the provisions of section 43B(f) of the Act.The ld CIT(A) also upheld the order of CIT(A) on the ground that SLP has been admitted in the apex court on the issue of allowability of leave encashment. 5. At the outset, the ld.AR submitted before us that the matter may be restored back to the file of the AO and keep the matter alive in view of the decision rendered by the Tribunal in its own case in ITA No.5457/Mum/2013 (AY-2010-11) order dated 30.6.2015 in which the identical issue has been decided by the Co-ordinate Bench of the Tribunal by relying on the decision of Hon'ble Supreme Court rendered in the Special Leave Petition (Civil No.22889/2008) vide order dated 8.5.2009 directing the revenue not to recover the penalty and interest which may accrue till the decision of the appeal by the Hon'ble Supreme Court in the case of "Exide Industries Ltd" and it would be open to the department to recover outstanding interest demand in case Civil appeal is allowed by the Hon'ble Sup....
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..... The ground raised by the assessee is allowed for statistical purposes." 2.3. Considering the totality of facts and following the aforesaid orders of the Tribunal, we remand this issue to the file of the ld. Assessing Officer to examine the claim of the assessee in the light of the aforesaid orders and decide afresh in accordance with law. Thus, this ground of the assessee is allowed for statistical purposes only. 3. The next ground raised pertains to disallowance of provision for ex-gratia expenses of Rs. 2,29,36,844/-. Our attention was invited to page-6 of the assessment order and the observation made in para-6 (page-3) of the assessment order. Attention was also invited to the ground raised before the Ld. Commissioner of Income Tax (Appeal) by explaining that in the ground of appeal wrong amount has been mentioned. The ld. CIT-DR though defended the addition but did not controvert that there was inadvertent error on behalf of the assessee on the basis of which adjudication could not be made in a required manner. 3.1. We have considered the rival submissions and perused the material available on record. It is noticed that, a confusion was created through the tax audito....