TMI Blog2018 (6) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... law. AO has committed an error in assuming so. - Decided in favour of assessee. Provision for leave encashment - Held that:- We set aside this issue to the file of the AO to fresh adjudication in accordance with law. The assessing officer may either wait for the judgment of Hon'ble Supreme Court in the case of Exide Industries Ltd. after HC decision [2007 (6) TMI 175 - CALCUTTA HIGH COURT] or may consider the alternative plea of the assessee that the claim be allowed on actual payment basis and if it is so done, the assessee would withdraw all the pending litigation, for all the years, wherein he sought deduction of the provision made for the leave encashment. Hence, this ground is allowed for statistical purposes. Disallowance of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and conferences and providing financial services and selling of Car through auto junction . The assessee company is a joint venture between Steel Authority of India Ltd. (SAIL) and Tata Steel Ltd. (TISCO). 3. We have heard the ld . counsel for the assessee Mr. Aakash Mansinghka and the ld. CIT DR Mr. G. Hangshing. The assessee filed two paper books as well as charts. 4. We have carefully considered the rival submissions, order of the authorities below, case law cited and held as follows. 5. First we take up in I.T.A. No. 1879/Kol/2016 for assessment year 2011-12 Ground no. 1 is on the issue of disallowance u/s 14A of the Act read with Rule 8D of the I.T. Rules. The facts relating to the disallowance are brought out at para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for disallowance, irrespective of the fact whether any such income has been earned during the financial year or not. As the assessee did not maintain any separate books of accounts for accounting for expenses incurred in relation to income not includible in its total income, the amount of expense actually incurred cannot be ascertained from the assessee s books of accounts satisfactorily. Accordingly, the provisions of section 14A read with Rule 8D of the Act are attracted in the case of the assessee. 6. The ld. Counsel for the assessee contends that the satisfaction was not recorded by the AO giving cogent reasons for rejecting the suo-moto computation of disallowance u/s 14A of the Act by the assessee. He relied on the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfaction, nature of loan taken by the assessee for purchasing the shares/making the investment in shares is to be examined by the AO. This bench of the Tribunal in the case of REI Agro Ltd. supra at page 9 held as follows: We find from the facts of the above case that the AO has not examined the account so the assessee and there is no satisfaction recorded by the AO about the correctness of the claim of the assessee and without the same he invoked Rule 8D of the Rules. While rejecting the cliam of the assessee with regard to expenditure or no expenditure, as the case may be, in relation to exempted income, the AO has to indicate cogent reasons for the same . This decision was upheld by the Hon ble High Court vide its j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s finality. The ld. DR submitted that this issue is being remanded back to the file of the AO by the Tribunal for awaiting the judgment of the Hon'ble Supreme Court and passing order in accordance thereof. 10. We set aside this issue to the file of the AO to fresh adjudication in accordance with law. The assessing officer may either wait for the judgment of Hon'ble Supreme Court in the case of Exide Industries Ltd. supra or may consider the alternative plea of the assessee that the claim be allowed on actual payment basis and if it is so done, the assessee would withdraw all the pending litigation, for all the years, wherein he sought deduction of the provision made for the leave encashment. Hence, this ground is allowed for stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be quantified. Further the AO states that, it is evident from the notes to account as well as the note of the statutory auditor that the amount in question may be recovered, though it may take considerable amount of time. The ld. Counsel for the assessee on facts refers to the letter from receiver and submits that on facts the recovery is doubtful and hence the same has been written off. He relied on the judgment of the Hon'ble Supreme Court in the case of TRF Ltd. vs. CIT reported in 323 ITR 397 (S C). Further relied on the certain judgments for the proposition that, the liability in question crystallized during this year and is alternatively allowable as business loss. The ld. DR submitted that the condition as to whether the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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