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TMI Blog2012 (8) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... ome being encashment of earned leave not paid by the due date u/s 43B - IT Appeal No. 1402 (Bang.) of 2010 - - - Dated:- 30-3-2012 - George George K. And Jason P. Boaz, JJ. Ashok Kulkarni for the Appellant S. K. Ambastha for the Respondent. ORDER George George K., Judicial Member This appeal instituted by the assessee is directed against the order of the CIT(LTU), Bangalore, dated 30-9-2010 passed u/s 263 of the Income-tax Act, 1961 [hereinafter referred to as the Act ]. The relevant assessment year is 2006-07. There is a delay of 4 days in filing of the appeal. The assessee-company had filed a petition for condoning the delay along with affidavit of the General Manager stating therei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading items like consumer and industrial products, liquor, Air and Bus tickets etc. Return of income for the concerned year was filed on 30-11-2006 declaring income of ₹ 50,81,68,273/-. Revised return of income was filed on 14-2-2008 declaring taxable income of ₹ 45,52,92,086/-. The assessment was completed u/s 143(3) on 29-10-2008 determining the income at ₹ 46,08,63,020/-. Subsequently, notice was issued for initiating proceedings u/s 263. The revisionary jurisdiction was initiated by the CIT for the following reasons: ( a ) Unpaid leave encashment is to be disallowed as per the provisions of sec.43B(f), ( b ) Interest payable u/s 244A on refund for the period from the due date to the date of filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive. With regard to the issue of leave encashment it is seen that the operation of the decision of the Hon'ble Kolkata High Court referred to by the assessee in the case of M/s. Exide Industries Ltd. Anr. In support of its case has been stayed by the Hon'ble Supreme Court. The Hon'ble Supreme Court has observed 'We further make it clear that the assessee would during the pendency of this Civil Appeal, pay tax as if section 43B(f) is on the Statute Book but at the same time it would be entitled to make a claim in its returns' In view of the above, the order dated 29-10-08 is erroneous and prejudicial to the interests of revenue in the light of the findings of the Hon'ble Supreme Court. The assessing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and perused the material on record. The assessment order is silent on the provisions of section 43B(f) and has blindly allowed unpaid portion of leave encashment as an allowable deduction. There has been no proper inquiry conducted by the AO. There is no discussion in the assessment order whether unpaid portion of the leave encashment is an allowable deduction. The Hon'ble Karnataka High Court in the case of CIT v. Namdari Seeds [2011] 203 Taxman 421 has observed thus: Hence there were no two views available to the AO and even if so, it is not stated in the order as to what are those two views and as to how he intends to adopt one out of these two views - Therefore the CIT is right in passing the revisional order under s.26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r not the assessee had given particulars or details of it. It is the duty of the assessing authority to do that and if the assessing authority had failed in that, more so in extending a tax relief to the assessee, the order definitely constitutes an order not merely erroneous but also prejudicial to the interests of the Revenue and, therefore, while the Commissioner was justified in exercising the jurisdiction under section 263 of the Act, the Tribunal was definitely not justified in interfering with this order of the Commissioner in its appellate jurisdiction. In the instant case, there is no discussion at all in the assessment order why the unpaid leave encashment is allowed as deduction. Prima facie, we feel, the AO has not noted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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