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TMI Blog2018 (1) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... s leave encashment - Held that:- Hon’ble Calcutta High Court in the case of Exide Industries Ltd vs Union of India reported in (2007 (6) TMI 175 - CALCUTTA High Court) had struck down the provisions of section 43B(f) of the Act. Hon’ble Supreme Court [2008 (9) TMI 921 - SUPREME COURT] had not stayed the judgement of the Calcutta High Court during Leave proceedings. But the Hon’ble Supreme Court had only passed an interim order on the impugned issue. Hence we deem it fit and appropriate , in the interest of justice and fair play, to set aside this issue to the file of the ld AO to pass orders based on the outcome of the main appeal on merits by the Hon’ble Supreme Court as stated supra. Accordingly Ground No. 2 raised by the assessee is allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed the same as exempt in the return of income. No disallowance was made u/s 14A of the Act by the assessee in the return of income. The tax auditor in his tax audit report had reported the disallowance figure of ₹ 31,96,716/- to be made u/s 14A of the Act. The Ld. AO without raising query to the assessee with regard to the issue of disallowance u/s 14A of the Act, directly proceeded to make disallowance of ₹ 31,94,716/- u/s 14A of the Act by merely placing reliance on the tax audit report of the assessee. 4. Before the Ld. CIT(A), the assessee pleaded that the interest charged in the profit and loss account pertains to loans which have been taken for the purpose of construction of storage terminals at Haldia and Kandla Por ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isfaction in terms of section 14A(2) read with Rule 8D(1) of the Rules, before proceeding to make disallowance as per Rule 8D(2) of the Rules. In the instant case, we find that the assessee has claimed that no expenditure has been incurred for the purpose of earning exempt income which is quite evident from the fact that no disallowance u/s 14A of the Act has been made by the assessee in the return of income. Once it is done by the assessee, it is the duty of the Ld. AO first to disturb such belief of the assessee by recording proper satisfaction having regard to the accounts of the assessee in terms of section 14A (2) of the Act read with Rule 8D(1) of the Rules. We find no such satisfaction has been recorded by the Ld. AO in the instant c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Ld. CIT(A). Aggrieved, the assessee is in appeal before us on the following ground:- 2. That on the facts and circumstances of the case, the learned CIT(Appeals) erred in confirming the action of the assessing officer in disallowing the leave encashment under section 43B of the Act. 8. We have heard the rival submissions. We find that though the Hon ble Calcutta High Court in the case of Exide Industries Ltd vs Union of India reported in 292 ITR 470 (Cal) had struck down the provisions of section 43B(f) of the Act as unconstitutional, the revenue had carried the matter further to the Hon ble Supreme Court which initially in Special Leave to Appeal (Civil) CC 12060 / 2008 dated 8.9.2008 had held as under:- The petition w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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