2025 (6) TMI 1078

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....d against the assessment order u/s 143(3) of the Act, dated 10.12.2019. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: "1. (a) For that on the facts and in the circumstances of the case and in law, the Ld. Addl/Jt. CIT(A) grossly erred in denying the alternate claim for deduction of leave encashment on actual payment basis. (b) For that on the facts and in the circumstances of the case and in law, the Ld. Addl/Jt. CIT(A) failed to appreciate that the provision for leave encashment which was claimed on accrual basis had been disallowed in earlier year/s and therefore the appellant was legally entitled to alternatively claim deduction for the leave encashment of Rs. 44,51,267/- a....

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....m pursuant to the judgment of the Hon'ble Supreme Court arising out of the decision in the case of Union of India vs M/s Exide Industries Ltd. reported in [2020] 425 ITR 1 (SC) wherein it has been held that the provision for leave encashment is allowable on payment basis only u/s 43B(f) of the IT Act, 1961. The Appellant by this additional ground is claiming relief u/s 43B(f) of Rs. 44,51,267/-being the payment of leave encashment as the same was claimed but offered for tax in the year of provision during AY 2002-03 & 2004-05 and not to be claimed in the AY 2003-04 in view of the Supreme Court decision (supra). The above additional grounds being legal grounds may kindly be admitted and adjudicated in view of the Suprem....

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....the returns of income for the respective assessment years but the same was claimed to be allowable on accrual basis before the appellate forums in view of the decision of Hon'ble jurisdictional Calcutta High Court in the case of Exide Industries vs. Union of India (164 taxman 9) dated 27.06.2007, wherein it was held that the provisions of Section 43B(f) of the Act was ultra vires and that the leave encashment was allowable on accrual basis. The said judgment of the Hon'ble Calcutta High Court had been stayed by the Hon'ble Supreme Court and therefore, the appellate authorities in AYs 2002-03, 2003-04 & 2004-05 had primarily directed the Ld. AO to allow/disallow the deduction claimed for provision of leave encashment depending up....

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.... in the case of PCIT vs. Shantinath Detergents (P.) Ltd (151 taxmann.com 68) wherein the Hon'ble Court has held that the Hon'ble ITAT, being an appellate authority can admit additional grounds in relation to taxability of a sum already offered to tax in the return of income. Similar view has been expressed by the Delhi High Court in the case of CIT vs. Jai Parabolic Springs Limited (306 ITR 42) and Hon'ble Bombay High Court in the case of CIT vs. Pruthvi Brokers & Shareholders Private Limited (252 CTR 151)." 5. We have considered the submission made. Since the leave encashment liability of Rs. 44,51,267/- was paid to the employees during the relevant AY 2017-18 which though pertained to the leave encashment provided for in th....