2012 (9) TMI 1165 - AT - Income Tax

Summary

Issues involved: Appeal filed by Revenue against CIT (A) order related to assessment year 2005-06, challenging deletion of addition made u/s 43B of the I.T. Act regarding provision for leave encashment not actually spent by the assessee.

Summary:

Issue 1: CIT (A) order challenged by Revenue
The Revenue filed an appeal against the CIT (A) order dated 12.02.2009, contending that it was wrong, perverse, illegal, and against the provisions of law. The grounds of appeal included the deletion of an addition made u/s 43B of the I.T. Act without the actual expenditure by the assessee.

Issue 2: Disallowance of claim u/s 43B by Assessing Officer
The assessee, a State Govt. Company, engaged in various business activities, filed a return declaring income. The Assessing Officer disallowed the claim for provision of leave encashment under u/s 43B as the actual payment was not made by the assessee.

Issue 3: CIT (A) decision and Tribunal's observation
The CIT (A) allowed the assessee's appeal and referred the matter back to the Assessing Officer for reconsideration of the double disallowance issue. The Tribunal, considering a similar case for A.Y. 2006-07, directed the Assessing Officer to reevaluate the claim in light of the Hon'ble Apex Court's decision in the case of Bharat Earth Movers (2000) 245 ITR 428.

Conclusion:
The Tribunal, following its previous decision, remitted the matter to the Assessing Officer for fresh consideration based on the Hon'ble Apex Court's ruling. The Department's appeal was allowed for statistical purposes, emphasizing the need for a reassessment in accordance with the legal provisions.