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TMI Blog2019 (10) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. Thus the ld. A/R has submitted that the assessee has filed the present miscellaneous application for seeking some appropriate directions to the AO. 3. On the other hand, the ld. D/R has vehemently opposed the miscellaneous application and submitted that the miscellaneous application is not maintainable as no mistake has been pointed out by the assessee in the order of the Tribunal. Further, the miscellaneous application is also barred by limitation. 4. At the outset, we note that this miscellaneous application has been filed by the assessee on 22nd July, 2019 against the order dated 17.05.2018. Therefore, it is beyond the period of limitation provided under section 254(2) of the IT Act being 6 (six) months from the end of the month in which the order is passed. Thus the miscellaneous application is barred by limitation. The assessee has also not pointed out how the miscellaneous application is not barred by limitation and maintainable. Further it is apparent that the assessee has not pointed out any mistake in the impugned order of the Tribunal but since the AO has refused to grant any relief, the assessee has filed the present miscellaneous application. The proper rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of expenses claimed by the assessee on account of provisions for leave encashment is not allowable to the assessee. (iv) Moreover the assessee has not furnished the documentary proof that the group leave encashment fund is an approved fund by the competent authority. In view of the above reasons , the provision made for the leave encashment of Rs. 35,19,00,000/-is disallowed and added to the total income of the assessee by the AO. 4.2 In first appeal, the ld. CIT(A) has confirmed the addition of Rs. 34,19,23,944/- by observing as under:- ''4.12.....The appellant has also relied upon the decision of ITAT Jaipur in the case of Jhalawar Kendriya Sahakari Bank. In this case also, the relief was allowed to the appellant on the submission made by the appellant that ''after contribution of premium, the appellant has no control over the same''. (page No 9 of the order). The Tribunal also relied upon the decision of Hon'ble Supreme Court in the case of Textool Company Ltd and decision of ITAT Delhi in the case of The Nainital Bank Limited. As I have already discussed above the facts of Textool Compay Limited, on which the decision of The Nainital Bank Limited was based wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibution made by the assessee in the said fund ultimately came back to the Textool Employees Gratuity Fund, approved by the Commissioner with effect from the following previous year. Thus the conditions stipulated in Section 36(1)(v) of the Act were satisfied.'' ....... Thus I am of the opinion that even the decision of Associated Electrical India Pvt. Ltd is also not applicable in the case under consideration. The appellant has also relied upon the decision of ITAT Jaipur in the case of Jhalawar Kendriya Sahakari Bank. In this case also, the relief was allowed to the appellant on the submission made by the appellant that ''after contribution of premium, the appellant has no control over the same''' (Page No. 9 of the order). The Tribunal also relied upon the decision of Hon'ble Supreme Court in the case of Textool Company Ltd and decision of ITAT Delhi in the case of the Nainital Bank Limited. As I have already discussed above the facts of Textool Company Limited on which the decision of the Nainital Bank Ltd was based were totally different from the facts of the appellant's case. Therefore, the decision of ITAT Jaipur is also not applicable to the case of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned and crystallized on a scientific method by the LIC. Thus, the assessee's payment of Rs. 40 lacs towards the same is within the framework of the scheme. In our considered view, the same is allowable deduction. This view further supported by the Hon'ble Supreme Court in the case of Textool Co. Ltd (supra) and ITAT judgement in the case of Nainital Bank Ltd (supra). Respectfully following the same, we hold that the assessee is eligible for this deduction.'' The ld.AR of the assessee further submitted that the assessee has discharged its liability towards leave encashment scheme, the same is therefore, allowable as expenditure u/s 37(1)of the Act. Taking into consideration the above facts and circumstances of the case and the decisions relied upon by the ld.AR of the assessee, it will be in the interest of equity and justice to restore the issue to the file of the AO for afresh adjudication. The assessee is directed to submit the written submission alongwith relevant details before the AO. Thus Ground No. 2(ii) of the assessee is allowed for Statistical purposes." Therefore, the Tribunal while remanding the matter to the record of the AO has also considered the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of section 43B(f) of the Income Tax Act, 1961. The case of the assessee is clearly hit by the provisions of Section 43B(f) of the Act. As the assessee has not made any payment to employees more particularly in view of the provisions of section 43B(f) of the Act, the deduction in respect of expenses claimed by the assessee on account of provisions for leave encashment is not allowable to the assessee. (iv) Moreover the assessee has not furnished the documentary proof that the group leave encashment fund is an approved fund by the competent authority. In view of the above reasons , the provision made for the leave encashment of Rs. 35,19,00,000/-is disallowed and added to the total income of the assessee by the AO. 4.2 In first appeal, the ld. CIT(A) has confirmed the addition of Rs. 34,19,23,944/- by observing as under:- ''4.12.....The appellant has also relied upon the decision of ITAT Jaipur in the case of Jhalawar Kendriya Sahakari Bank. In this case also, the relief was allowed to the appellant on the submission made by the appellant that ''after contribution of premium, the appellant has no control over the same''. (page No 9 of the order). The Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y for the benefit of the employees. In the instant case, it is evident from the findings recorded by the Commissioner and affirmed by the Tribunal that the assessee had absolutely no control over the funds created by the LIC for the benefit of the employees of the assessee and further al the contribution made by the assessee in the said fund ultimately came back to the Textool Employees Gratuity Fund, approved by the Commissioner with effect from the following previous year. Thus the conditions stipulated in Section 36(1)(v) of the Act were satisfied.'' ....... Thus I am of the opinion that even the decision of Associated Electrical India Pvt. Ltd is also not applicable in the case under consideration. The appellant has also relied upon the decision of ITAT Jaipur in the case of Jhalawar Kendriya Sahakari Bank. In this case also, the relief was allowed to the appellant on the submission made by the appellant that ''after contribution of premium, the appellant has no control over the same''' (Page No. 9 of the order). The Tribunal also relied upon the decision of Hon'ble Supreme Court in the case of Textool Company Ltd and decision of ITAT Delhi in the case of the Nainit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... detail above. The payment of leave encashment is a contractual liability8, a charge on assessee's profit. To ensure timely benefit of leave encashment of employees' scheme is devised by the LIC, which works out the leave encashment liability and fixation of premium. The liability is ascertained and crystallized on a scientific method by the LIC. Thus, the assessee's payment of Rs. 40 lacs towards the same is within the framework of the scheme. In our considered view, the same is allowable deduction. This view further supported by the Hon'ble Supreme Court in the case of Textool Co. Ltd (supra) and ITAT judgement in the case of Nainital Bank Ltd (supra). Respectfully following the same, we hold that the assessee is eligible for this deduction.'' The ld.AR of the assessee further submitted that the assessee has discharged its liability towards leave encashment scheme, the same is therefore, allowable as expenditure u/s 37(1)of the Act. Taking into consideration the above facts and circumstances of the case and the decisions relied upon by the ld.AR of the assessee, it will be in the interest of equity and justice to restore the issue to the file of the AO for afresh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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