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2016 (7) TMI 815 - ITAT KOLKATA

2016 (7) TMI 815 - ITAT KOLKATA - TMI - Disallowance u/s 14A - Held that:- We find that the issue involved is squarely covered by the Hon’ble Jurisdictional Calcutta High Court in the case of CIT vs R.R.Sen and Brothers (2013 (7) TMI 260 - Calcutta High Court) and accordingly direct the ld. AO to adopt 1% of the exempt income for making disallowance u/s 14A of the Act. - Decided partly in favour of assessee. - Disallowance of provision of leave encashment u/s 43B(f) - Held that:- As decided .....

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tingent liability. - Decided in favour of assessee. - Disallowance u/s 14A of the Act could be made while computing the book profit u/s 115JB - Held that:- As already in ground no.1 herein above that 1% of exempt income be adopted for the purpose of disallowance u/s 14A of the Act. We held that the same disallowance be made while computing the book profit u/s 115JB of the Act as requested by the ld. AR. - Decided partly in favour of assessee. - ITA.2700/Kol/2013 - Dated:- 8-7-2016 - Shri N.V .....

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the disallowance u/s 14A of the Act amounting to ₹ 5,428/- could be made in the facts and circumstances of the case. 3. The brief facts of this issue are that the assessee during the previous year relevant to the assessment year under consideration has earned dividend amounting to ₹ 1,04,089/- which was claimed exempt u/s 10(34) in the computation of income filed along with the return. The ld. AO adopted 0.5% of investments in terms of Rule 8D(2)(iii) for the purpose of disallowance .....

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olkata has erred in confirming the disallowance of provision for leave encashment amounting to ₹ 16,40,000/- made by the Assessing Officer under section 43B of the Income Tax Act in disregard of the decision of jurisdictional High Court in the case of Exide Industries Ltd. (2921TR 470) and also the order of his predecessor, thus violating the rule of consistency. 3. That, on facts as well as on law, the Ld. CIT(A)-XII, Kolkata has erred in confirming the disallowance of ₹ 5,428/- all .....

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to A.Y.2008- 09 the provision of rule 8D could not be made applicable as decided by the Hon ble Bombay High Court in the case of Godrej and Boyce and Manufacturing Ltd. Reported in 328 ITR 81 (Bom). He further argued that the Hon ble Jurisdictional Calcutta High Court in the case of CIT vs R.R.Sen and Brothers in G.A.No.3019 of 2012 in ITAT No.243 of 2012 dated 04.01.2013 had held that 1% of the exempt income need to be adopted for disallowance u/s 14A of the Act. In response to this, the ld. D .....

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ovision of leave encashment amounting to ₹ 16,40,000/- could be made by applying the provision of section 43B(f) of the Act in the facts and circumstances of the case. 4.1. We have heard the rival submissions. We find that this issue is squarely covered by the decision in assessee s own case for A.Y.2008-09 in ITA No.1578/Kol/2012 dated 07.09.2015 wherein it was held as follows :- 6. We have heard the rival submissions and the citation quoted by the ld. AR. We find that it is relevant to g .....

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hould be certain is the incurring of the liability. It should also be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied the liability is not a contingent one. The liability is in praesenti though it will be discharged at a future date. It does not make any difference if the future date on which the liability shall have to be discharged is not certain.... Applying the above said settled principles to the .....

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not a contingent liability. The High Court was not right in taking the view to the contrary. 13. The appeal succeeds and is allowed. Section 43B(f) is struck down being arbitrary, unconscionable and de hors the apex Court decision in the case of Bharat Earth Movers (supra). It is observed that the revenue had preferred Special Leave Petition before the Hon ble Supreme Court against the judgment of the Hon ble Calcutta High Court. The High Court in Special Leave Petition to appeal (Civil) CC.1206 .....

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e granted. Pending hearing and final disposal of the Civil Appeal, Department is restrained from recovering penalty and interest which is approved till day. It is made clear that as far as outstanding interest payment as on date, it would be open to have 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 s .....

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