9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (10) TMI 1329 - AT - Income TaxDisallowance of deduction claimed under the head provision of leave encashment u/s 43B(f) - HELD THAT - As identical issue was considered by the Coordinate Bench of the Tribunal in assessee s own case relating to A.Y. 2007- 08 2016 (2) TMI 889 - ITAT MUMBAI restored this matter to the file of the Assessing Officer with the direction to decide the issue in the light of the decision rendered by Hon ble Supreme Court in the case of M/s. Exide Industries Ltd. Another 2009 (5) TMI 894 - SC ORDER Even though the assessing officer did make a reference to the above said order of Hon ble Supreme Court the Ld A.R submitted that the assessee should be given benefits as observed by the Hon ble Apex Court in the matter of interest and penalty. Accordingly consistent with the view taken by the Coordinate Bench in assessee s own case relating to A.Y. 2007-08 we restore this matter to the file of the Assessing Officer with the direction to examine this issue afresh Disallowance of employees contribution to ESIC and Labour welfare fund - HELD THAT - We are of the view that the claim of the assessee is required to be allowed in view of the binding decision GHATGE PATIL TRANSPORTS LTD. 2014 (10) TMI 402 - BOMBAY HIGH COURT since the assessee has paid the employees contribution before the due date for filing return of income. Accordingly we set aside the order passed by learned CIT(A) on this issue and direct the Assessing Officer to allow claim of the assessee. Characterization of income - Excise duty refund received by the assessee - revenue or capital receipt - HELD THAT - According to Ld A.R this issue is squarely covered by the decision rendered by Hon ble J K High Court in the case of Shree Balaji Alloys 2011 (1) TMI 394 - JAMMU AND KASHMIR HIGH COURT . However the Ld D.R submitted that there is some confusion about the quantum of deduction and also the parity of facts between the assessee s case and the case of Shree Balaji Alloys (supra) need to be examined. We find merit in the submissions of Ld D.R. Accordingly in our view this issue requires fresh consideration at the end of the Assessing Officer in order to find out parity of the facts between the assessee s case and the case of the Shree Balaji Alloys that was decided by Hon ble J K High Court. Accordingly we set aside the order passed by learned CIT(A) on this issue and restore the matter to the file of the Assessing Officer with the direction to examine the parity of the facts Disallowance Relating to mark to market loss - assessee provided for loss arising on the outstanding derivative contracts on foreign exchange on account of valuation done as at the year end - in respect of provision made for loss on account of valuation the AO took the view the same is not allowable in view of the Instruction No.3/2010 dated 23/3/2010 and accordingly rejected the claim of the assessee - HELD THAT - Having heard rival submissions we are of the view that there is merit in the submissions made by the Ld A.R. The forward contract in foreign exchange has been held to be the business activity and the assessee has entered into the forward contracts upon receipt of orders from its foreign clients. Since the export bills have not been raised as on the date of Balance Sheet the assessee was required to value the outstanding forward contracts which is in accordance with the requirements of accounting standards and accounting principles. Accordingly we are of the view that the loss claimed on valuation of outstanding forward contracts is allowable as deduction. Accordingly we set aside the order passed by Ld CIT(A) on this issue and direct the AO to allow the claim of the assessee.
Issues:
1. Disallowance of deduction claimed under the head "provision of leave encashment" 2. Disallowance of employees' contribution to ESIC and Labour welfare fund 3. Treatment of excise duty refund as capital or revenue receipt 4. Disallowance of mark to market loss relating to outstanding derivative contracts on foreign exchange Issue 1: Disallowance of deduction claimed under the head "provision of leave encashment" The assessee appealed against the disallowance of deduction under sec. 43B(f) of the Act. The Tribunal referred to a Supreme Court order and directed the Assessing Officer to reexamine the issue in light of the decision. The Tribunal upheld the assessee's claim based on the Supreme Court's observation regarding interest and penalty, similar to a previous case. Issue 2: Disallowance of employees' contribution to ESIC and Labour welfare fund The assessee contended that the contribution was paid before the due date, citing a High Court decision. The Tribunal agreed with the assessee, emphasizing the timely payment and allowed the claim based on the binding decision of the Jurisdictional High Court. Issue 3: Treatment of excise duty refund as capital or revenue receipt The dispute arose over the classification of excise duty refund as capital or revenue receipt. The Tribunal noted conflicting decisions and referred the matter back to the Assessing Officer to determine the parity of facts between the assessee's case and a precedent upheld by the Supreme Court. The Tribunal instructed fresh consideration based on the High Court's decision. Issue 4: Disallowance of mark to market loss relating to outstanding derivative contracts on foreign exchange The Tribunal considered the provision made for loss on valuation of outstanding derivative contracts. The assessee argued that such valuation was in line with Accounting standards and principles. The Tribunal accepted the assessee's position, emphasizing that the valuation was part of normal business activity and allowed the deduction for the loss provided. The Tribunal directed the Assessing Officer to allow the claim after finding merit in the submissions. In conclusion, the Tribunal allowed the appeals of both the assessee and the revenue for statistical purposes, providing detailed reasoning and directions for each issue raised in the case. The judgment emphasized the application of legal precedents, High Court decisions, and Accounting principles to resolve the disputes effectively.
|
