TMI Blog2017 (7) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... tains to upholding the disallowance of provision for leave encashment of ₹ 3,53,84,604/- u/s 43B of the Income Tax Act, 1961 (hereinafter the Act). 2. During hearing, the ld. counsel for the assessee, Shri Yogesh A. Thar, claimed that the impugned issue is covered by the decision of the Tribunal for Assessment year 2008-09 (ITA No.1269 1479/Mum/2012) order dated 18/08/2016. This factual matrix was not controverted by Shri N.P. Singh, ld. CIT-DR. However, the ld. CIT-DR defended the addition by contending that if the version of the assessee is accepted then it 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 dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. Universal Medicare Pvt. Ltd. vs. ACIT(supra), and after hearing both the parties and considering the issue that in another matter in the case of Exide Industries Ltd. vs. Union of India, 292 ITR 470 (Cal), where provisions of section 43B(f) were held to be arbitrary and in Special Leave Petition before Hon ble Apex Court vide order dated 8/9/2008 the judgment of Hon ble Culcutta High has been stayed and also the fact that Hon ble Bombay High Court has admitted the issue in consideration in the appeal filed by the department in the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly restored to the file of the AO. 5. The Ld. D.R. has also not raised any objection against restoration of matter to the AO. 6. We have considered the rival submissions. It is correct that the decision of the Hon ble Kolkata High Court in the case of Exide Industries Ltd. (supra) has been stayed by the Hon ble Supreme Court vide order dated 08.09.08 passed in SLP to Appeal (Civil) CC 12060/2008 wherein the Hon ble Supreme Court has made the following observations: UPON 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 Civ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the aforesaid order of the Tribunal for ready reference and analysis:- 3. Only issue raised by the assessee in the grounds of appeal is against confirmation of disallowance of ₹ 21,67,547/- by the CIT(A) as made by the AO for provisions of leave encashment. 4. The facts in brief are that during the course of assessment proceedings the AO noted that assessee has not paid ₹ 21,67,547/- provided 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Hon ble Supreme Court in the case of Exide Industries Ltd. (supra) We find that the facts of the case before us is idential as decided by the coordinate bench in the decisions(supra) and therefore by follwing the decision of the bench respecfully, we restore the matter back to the file of the AO by setting aside the order of CIT(A) and decide the issue accordingly. 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 ₹ 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 wr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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