9911796707
TMI Blog2022 (11) TMI 1139X X X X Extracts X X X X X X X X Extracts X X X X ..... 37 - employees of the assessee was eligible to participate in share based compensation scheme of the ultimate holding company, whereby the shares of the ultimate holding company are granted to the employees of the assessee on satisfying certain conditions - HELD THAT:- In assessee s group case, namely, EIT Services India Pvt. Ltd. v. DCIT [ 2022 (8) TMI 1309 - ITAT BANGALORE] had held that the ESOP expenditure is to be allowed as a deduction u/s. 37 of the I.T. Act. The Tribunal had followed the judgment of the Hon ble jurisdictional High Court in the case of CIT v. Biocon Limited [ 2020 (11) TMI 779 - KARNATAKA HIGH COURT] TDS u/s 195 - The assessee has raised grounds with regard to the issue that the assessee is not liable for TDS u/s. 195 of the I.T. Act - We are of the view that these grounds need not be adjudicated, since, on perusal of the final assessment, it is clear that the disallowance of ESOP expenses has made under the provisions of section 37 of the I.T. Act (though there was some discussion in the draft assessment order with reference to disallowance u/s. 40(a)(i). Payment towards leave encashment - HELD THAT:- In the light of the decision of the Hon ble Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 25.02.2021 granted partial relief to the assessee, whereby the transfer pricing adjustment was reduced to Rs. 30,29,80,250. The DRP, however, confirmed the A.O.'s view on corporate tax disallowance. Pursuant to the DRP's directions, the impugned final assessment order was passed on 30.03.2021 computing the total income as under:- Computation of Income Returned income 286,32,76,090 Add: TP adjustment 30,29,80,250 Add: Disallowance u/s 37 7,28,99,000 Total taxable income 323,91,55,340 4. Aggrieved by the final assessment order, the assessee has filed this appeal before the Tribunal, raising grounds with regard to the transfer pricing adjustment as well as corporate tax disallowance. However, during the course of hearing, as regards the transfer pricing adjustment is concerned, the learned AR had only pressed ground 1.12, namely, for exclusion of three companies as comparables and ground 1.13 for inclusion of three companies as comparables. The surviving grounds, namely, ground 1.12, 1.13 and corporate tax grounds, read as follows:- "1.12 The learned AO/learned TPO/Hon'ble DRP has grossly erred in not rejecting the following companies; - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.7. The Honorable DRP has erred in law and on facts by placing reliance on the case laws decided in different context and not applicable to the facts of the Appellant. 2.8. The Honorable DRP has erred in law and on facts by stating that the ESOP is uncertain by not appreciating the fact that the ESOP expenses are actual expenses claimed by the Appellant, based on actual invoices issued and actual payments made. Non-Applicability of section 195 of the Act 2.9. The learned AO has erred in law and on facts by disregarding that the ESOP expense is liable to TDS under section 192 of the Act as perquisite in the hands of the employees and appropriate taxes are deducted and remitted by the Appellant, which is evidenced by sample Form 16 copies furnished before the honorable DRP. 2.10. The learned AO has erred in law and on facts by stating that the provisions of section 195 of the Act shall be applicable on the remittance of reimbursement towards ESOP without taking cognizance of the fact that there was no income element arising to the recipient of such remittances. 2.11. The learned AO has erred in law and on facts by stating that the provisions of section 195 of the Act ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the decision of Hon'ble Calcutta High Court in the case of Exide Industries Limited v. Union of India [2007] (164 taxman 9]), which was subsequently rejected. 3.3. The Learned AO while assessing the total income of the Appellant for the year under consideration, have erred in not allowing a deduction for education cess and secondary & higher education cess (collectively known as "education cess"), although not claimed as a deduction by the Appellant in its return of income. 4. Other matters 4.1. The Learned AO has erred, in law and on facts, in initiating penalty proceedings under section 271(1)(c) of the Act. 4.2. The Learned AO has erred in law and on facts, in erroneous consideration of taxable income in assessment order vis a vis Computation sheet while calculating the taxable income and tax thereon. The appellant craves leave to add, alter, vary, omit substitute or amend the above grounds, at any time before or at the time of hearing of the appeal. Each of the above objections is independent and without prejudice to the other grounds preferred by the appellant." We shall first adjudicate the transfer pricing adjustment. Transfer Pricing Issue ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operating revenue OR 13,554,203,000 Taxpayers operating cost OC 11,505,466,000 Taxpayers operating profit OP 20,48,737,000 Taxpayers PLI PLI=OP/OC 17.80% 35th percentile margin of comparable set 20.44% Adjustment required Yes (if PLI<35th percentile) Median Margin of comparable set M 23.44% Arm's Length Price ALP=(1+M)8OC 14,202,347,230 Price Received OR 13,554,203,000 Shortfall being adjusted ALP-OR 64,81,44,230 9. As per the DRP's directions, Microland Limited was included in the final list of comparables. Further, the DRP directed the TPO to re-compute the PLI of Eclerx Services Limited in the ITES segment. The final list of comparables and its PLI consequent to the DRP's order and the ALP computation are as under:- List of comparables consequent to DRP's order: S.No .Company name PLI(OP/OC)(%) 1. BNR Udyog Limited 4.40 2. Microland Limited 14.92 3. One Touch Solutions (India) Ltd. 15.33 4. Tech Mahindra Business Services Ltd. 20.44 5. Infosys BPM Ltd. 26.44 6. S P I Technologies India Pvt.Ltd. 37.77 7. Eclerx Services Ltd. 56.28 35th Percentile 15.33 Median 20.44 65th Percentile 26.44 ALP a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that Infosys BPM Ltd. should be rejected as a comparable because it is functionally not comparable, has diversified activities and lack of segmental data, different business model, brand profits, various revenue models, presence of intangibles, outsourcing costs, marketing expenses and turnover. It offers business outsourcing solutions to several clients and span across multiple industry segments. The company's catering to a variety of industries does not change the nature of functions carried out as it is committed to provide best in class services to both horizontal and vertical focus areas. 12. The DRP was of the view that just because the company is providing cloud based services over various mainframe computers, the company would not be functionally different as claimed by the assessee and rejected this plea of the assessee. 13. Regarding the plea of the assessee that this company is into high end ITES service provider, and hence not comparable, the DRP held that under TNMM, there is no requirement that the comparables should render the same or identical services. It would be sufficient, if the services fall under the broad industry segment ITES. In this regard th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and has contributed to the revenue growth or profitability. Therefore, the presence of brand, as such, has not affected comparability. Further, there is no information in the annual report to indicate that the company has undertaken any major R&D initiatives & own intangibles. Therefore, the presence of intangible in the form of goodwill, which is also insignificant, as the value is only Rs. 19 crore compared to the revenue from operations of Rs. 3050 crores do not have any impact on the profits of the company. Hence, these pleas were rejected by the DRP. 18. The assessee's contention that this comparable has incurred significant selling and marketing expense was also not accepted by the DRP, since from the perusal of the annual report, the DRP noted that the expenses on this count is only 4.56% of the total expenditure and which is not at all significant to affect the profitability of the comparable. 19. Thus, in view of the discussions held above, all the grounds raised by the assessee were rejected and the action of the AO/TPO was upheld by the DRP. 20. We have heard both the parties and perused the material on record. This comparable has been considered as not compara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost incurred to provide the services. Further, he submitted that since the cost structure and revenue model of this company is different with that of the assessee, this company ought to be rejected as a comparable company. He relied on the decision of the co-ordinate bench in assessee's own case ADP (P.) Ltd. (supra) wherein the coordinate bench excluded this company as comparable. 16.2 The ld. DR, on the other hand, submitted that presence of outsourcing cost/subcontracting cost does not affect functional comparability. Further, it reduces the operating margin of the company, which is beneficial to the assessee. He, therefore, submitted that the TPO/DRP has rightly included this company as comparable. 16.3 We have considered the rival submissions and perused the material on record as well as the orders of TPO/DRP. We find that the co-ordinate bench in assessee's own case ADP (P.) Ltd. (supra) has excluded this company as comparable by observing as under: '38. Having regard to the rival contentions and the material on record, we find we find that the Co-ordinate Bench of this Tribunal in the assessee's own case not only for the A.Ys 2009-10 for the A.Y 2010-11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so the case of the assessee that this company has a turnover of Rs. 1405.10 crores which is 25 times of the turnover of the assessee and hence, is not comparable to the assessee. The Ld. Counsel for the assessee had also placed reliance upon the TPO's order in the case of M/s. IGS Imaging Services India Ltd., to hold that there are exceptional circumstances during the relevant financial year due to which this company is not comparable to the assessee. The Ld. Counsel for the assessee also submitted that the segmental details of this company are not available and hence, has to be excluded on this count also. 11.2.2 We find that the assessee's contentions about the presence of 'brand value' and owning of 'intangibles' is supported by the evidence on record. However, as regards the extraordinary event or exceptional circumstance there is no material placed before us by the Ld. Counsel for the assessee. Therefore, merely because the TPO in another case has held that there is an extraordinary event for which this company has to be excluded from the list of comparables, it cannot be excluded. Such claim has to be supported by evidence on record. As regards the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily in the typesetting business, including transformation of unedited manuscripts into final print-ready files, supply of structured data for electronic publishing and providing end-to-end project management services. 14.1 SPI Technologies India Private Limited has been excluded in the case of Entercoms Solutions Private Limited: TS-548-ITAT-2021(PUN)-TP] Page 10 of the order - AY 2015-2016. Below is the relevant extract from the order for ready reference: "10. We, place reliance on the afore-stated judicial precedents where there is an emerging consistent view in this regard that if an extraordinary event has taken place by way of amalgamation that company cannot be considered as a comparable one and following the same parity of reasoning, we direct the Assessing Officer/TPO to exclude SPI Technologies India Pvt. Ltd. from the final set of comparables while computing international transactions in respect of the Assessee in ITes segment." 14.2 In view of the above-mentioned reasons, Ld. A.R. requested to direct the TPO to exclude this comparable from the final list of ITeS Segment. 14.3 Ld. D.R. relied on the order of Ld. DRP. 14.4 We have heard the rival subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. In any case the issue now stands concluded by final orders of this Court in case of Aptara Technology (P.) Ltd. (supra) and PTC Software (I) (P.) Ltd.'s case (supra) and it is being followed. (v) In view of the above, as the proposed question is covered by the decision of this Court, no substantial question of law arises. Thus, not entertained." 9. That even the Pune Bench of the Tribunal in the case of Brintons Carpets Asia (P) Ltd. Vs. Deputy Commissioner of Income Tax, ITA No. 1312 & 1349/PN/2015 dated 29th March, 2019 observed that the assessee before the Tribunal had first claimed that Accentia Technologies Ltd. cannot be selected in the final list of comparables as during the year under consideration, there was an extraordinary event of amalgamation. Thereafter, the Tribunal has analyzed how and what extraordinary event took place in that case and in such scenario, the company cannot be considered as comparable one and the relevant extracts in this regard are as follows: "13. ...................... The learned Authorized Representative for the assessee has pointed out that though the CIT(A) says that there is no such amalgamation but his finding is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lling and coding services, application development & customization (segmental data not available). Moreover, it was contended that the sales/turnover of the said concern was more than Rs. 50 crores for the year under consideration which did not meet with turnover filter applied by the assessee. On this point, it was pointed out that the assessee had selected sales/turnover filter of 1-50 crores i.e. any concerns having a turnover exceeding Rs. 50 crores were excluded. Thirdly, it was pointed out that the activities of the said concern were not comparable to the activities of the assessee. 11. The TPO has noted the aforesaid objections of the assessee in para 18.1 of his order and has rejected the same by merely noticing that 75% of the revenue/income of the said concern is from ITES and therefore it is to be considered as a comparable. Before us, the Ld. Representative for the assessee has reiterated the submissions put-forth before the TPO in order to justify exclusion of the said concern from the list of comparables. In particularly, it has been pointed out that for the very same assessment year, the Bangalore Bench of the Tribunal in the case of Symphony Marketing Solutions In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions in respect of the assessee in ITes segment." 14.5 In view of the above order, we direct the AO/TPO to exclude SPI Technologies Pvt. Ltd. from the list of comparables selected for ITeS segment. iv. Eclerx Services Ltd. 15. Ld. A.R. submitted that the company offers solutions in the nature of Knowledge Process Outsourcing (KPO) Services. The Appellant submits that the nature of the high end KPO services demanding presence of different skillsets performed by the Company cannot be compared to the low end ITES functions performed by the Appellant. 15.1 Further, Eclerx Services Limited has been excluded in the case of Swiss Re Global Business Solutions India (P.) Ltd. [2022] 137 taxmann.com 417 (Bangalore - Trib.) AY 2016-2017 (Refer Page 163 of the Case Law Compilation, Para 22-30). Below is the relevant extract from the order for ready reference: 22. Regarding exclusion of Eclerx Services Ltd., the assessee argued that this company is a KPO company and hence, it is not a good comparable. The DRP observed that there is a thin line of difference between BPO and KPO services. KPO is termed as an upward shift of the BPO industry in the value. chain. Thus, BPO trying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entity. The DRP observed that as far as the limited risk in the case of captive service providers is concerned, if this argument is accepted then it cannot be compared to any company as most of the companies will be independent companies. Rather it should be compared to independent companies only as the price received for the services by them will be determined by market forces, which is not the case of the assessee. The assessee itself can be characterized as a contract service provider, which means that it operates on a cost plus model. Therefore, this argument was also rejected. 28. Thus, the DRP upheld the rejection of this company as a comparable. 29. We have heard both the parties on the issue. This company has also been considered as not comparable in assessee's own case for A.Y. 2014-15 in IT(TP)A No. 3181/Bang/2018 dated 21-5-2020 wherein it was observed as under:- "It is noted that this company is involved in high-end KPO services whereas assessee is providing IT enabled services by rendering remote data processing in the field of reinsurance. In our opinion functions performed by this company is not similar to that of assessee even though assessee before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CLX Europe (b) Amalgamation of Agilest consulting (P.) ltd. 17.2 He relied on the decision of the co-ordinate bench in assessee's own case ADP (P.) Ltd. (supra) wherein the co-ordinate bench excluded this company as comparable. 17.3 The ld. DR, on the other hand submitted that this company is engaged in rendering ITeS, therefore, functionally comparable to assessee. He submitted that amalgamation has no impact on the profits of the company. He, therefore, submitted that TPO/DRP has rightly included this company as comparable to assessee company. 17.4 We have considered the rival submissions and perused the material on record as well as the orders of TPO/DRP. We find that the coordinate bench in assessee's own case for AY 2014-15 cited supra has excluded this company as comparable by observing as under: 38. Having regard to the rival contentions and the material on record, we find we find that the Co-ordinate Bench of this Tribunal in the assessee's own case not only for the A.Ys 2009-10 for the A.Y 2010-11 has also considered this issue at Paras 6 to 9 in ITA No. 221/Hyd/2015 which reads as under: "6. The TPO has selected many comparables and among the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to the assessee. The Ld. Counsel for the assessee had also placed reliance upon the TPO's order in the case of M/s. IGS Imaging Services India Ltd., to hold that there are exceptional circumstances during the relevant financial year due to which this company is not comparable to the assessee. The Ld. Counsel for the assessee also submitted that the segmental details of this company are not available and hence, has to be excluded on this count also. 11.2.2 We find that the assessee's contentions about the presence of 'brand value' and owning of 'intangibles' is supported by the evidence on record. However, as regards the extraordinary event or exceptional circumstance there is no material placed before us by the Ld. Counsel for the assessee. Therefore, merely because the TPO in another case has held that there is an extraordinary event for which this company has to be excluded from the list of comparables, it cannot be excluded. Such claim has to be supported by evidence on record. As regards the functional dissimilarity and huge turnover and brand value is concerned, we find that this Tribunal in assessee's own case for A.Y. 2009-10 while consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly, we direct the AO/TPO to exclude this company as comparable from the list of comparables." 15.6 In view of the above order of the Tribunal, we direct the AO/TPO to exclude this company viz. Eclerx Services Ltd. from the list of comparables." 11. In view of the above order of the Tribunal, which is a group company of the assessee, and having same profile of the assessee, we direct the TPO to exclude (i) Infosys BPO Limited, (ii) SPI Technologies India Private Limited, and (iii) Eclerx Services Limited from the list of comparables and recompute the ALP of the international transaction. Ground No. 1.13 (assessee is seeking inclusion of three companies) 12. Insofar as Informed Technologies India Limited and Crystal Voxx Limited are concerned, we find that the Tribunal in assessee's group case in the case of EIT Services Private Limited v. DCIT (supra), had restored the matter to the TPO to examine whether the above two companies can be considered as comparable company. The relevant finding of the Tribunal in this regard reads as follows:- "16. Assessee wants inclusion of Informed Technologies India Ltd. Ld. A.R. submitted that the Ld. TPO has allege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Annual Report of 'Informed' (placed at pages 391 to 443 of Paper Book). In this regard, reliance was placed on the decision of the Coordinate Bench of this Tribunal in the case of CGI Information Systems & Management Consultants (supra) wherein this company 'Informed' was held to be comparable to companies rendering ITES. It was prayed that, in the light of the above, this company 'Informed Technologies Ltd.,' be included in the final set of comparables in the case on hand. 10.3 Per contra, the learned DR for Revenue supported the orders of the authorities below. 10.4.1 We have considered the rival submissions and carefully perused the material on record. On a perusal of the Annual Report of this company 'Informed', it is seen that at page 12 thereof it is stated that this company is engaged in and operating as an ITES provider. A perusal of the TPO's order also indicates that the TPO has not disputed that this company is functionally comparable to the assessee in the case on hand; which is rendering back office ITES. From a perusal of the profit and loss account at page 30 of the Annual Report of 'Informed' it is seen that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee as it is an ITES provider and qualifies the service income filter of 75% applied by the TPO. It was submitted that the entire service income of 'Informed' at Rs. 2,58,53,362/- is from rendering of ITES only and the TPO/DRP have wrongly considered "other income" of Rs. 1,22,85,303/- as "Service Income". In support of this contention, the learned AR drew the attention of the Bench to the relevant portion of the Annual Report of 'Informed' (placed at pages 391 to 443 of Paper Book). In this regard, reliance was placed on the decision of the Coordinate Bench of this Tribunal in the case of CGI Information Systems & Management Consultants (supra) wherein this company 'Informed' was held to be comparable to companies rendering ITES. It was prayed that, in the light of the above, this company 'Informed Technologies Ltd.,' be included in the final set of comparables in the case on hand. 10.3 Per contra, the learned DR for Revenue supported the orders of the authorities below. 10.4.1 We have considered the rival submissions and carefully perused the material on record. On a perusal of the Annual Report of this company ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he functional profile of the Appellant. 17.2 Further, the Appellant submits that Crystal Voxx is functionally comparable and qualifies all the quantitative filters applied by the learned TPO and the Appellant. 17.3 The comparable has been accepted by the Ld. DRP in AY 2017-18 in Appellant's own case (He referred Page 72 of the Case Law Compilation). 17.4 Further, Crystal Voxx has been included in the case of Ocwen Financial Solutions (P.) Ltd. [2019] 108 taxmann.com 306 (Bangalore - Trib.) AY 2014-2015 (He referred Page 178-179 of the Case Law Compilation, Para 11). The relevant extract is reproduced below for ready reference: "11. Crystal Voxx Ltd., ('Crystal') 11.1 This company, 'Crystal' was proposed by the assessee before TPO as an additional comparable to be included in the final set of comparables. The TPO, however, rejected the assessee's proposal on the ground that this company had not reported any earnings from export of services and therefore it is not possible to determine as to whether 'Crystal' has exports/foreign earnings more than 75% of total sales/turnover. The DRP concurred with the finding of the TPO; observing that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve heard the rival submissions and perused the materials available on record. This company has been considered as not comparable in the case of Ocwen Pvt. Ltd. vide para 11 of that order, which is extracted as follows:- "11. Crystal Voxx Ltd., ('Crystal') 11.1 This company, 'Crystal' was proposed by the assessee before TPO as an additional comparable to be included in the final set of comparables. The TPO, however, rejected the assessee's proposal on the ground that this company had not reported any earnings from export of services and therefore it is not possible to determine as to whether 'Crystal' has exports/foreign earnings more than 75% of total sales/turnover. The DRP concurred with the finding of the TPO; observing that while it is stated that "income from foreign currency" is Rs. 3,23,08,386/-, it is not clear whether this relates to export of services as this information is not available and therefore this company 'Crystal' is rejected. 11.2 Before us, it was contended that this company 'Crystal' is functionally comparable to the assessee in the case on hand as it is operating as a BPO Company which is a ITE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rable company, since according to the TPO, for the said assessment year the company has passed all the TPO's filter and the FAR analysis are similar. 15. In view of the order of the TPO for assessment year 2015-2016, we restore the comparability of Ace BPO Services Private Limited to the files of the TPO. The TPO shall consider the issue afresh in accordance with law. It is ordered accordingly. 16. In the result, ground 1.12 is allowed and ground 1.13 is partly allowed for statistical purposes. Corporate Tax Issues (Grounds 2.1 to 2.15) 17. Grounds 2.1 to 2.15 relate to disallowance of ESOP expenses u/s. 37 of the I.T. Act. The employees of the assessee was eligible to participate in share based compensation scheme of the ultimate holding company, whereby the shares of the ultimate holding company are granted to the employees of the assessee on satisfying certain conditions. As per Note 28 of the financial statement, the assessee had two types of share based compensation scheme operational, namely, Employee Stock Purchase Plan (ESPP) and Employee Stock Incentive Plan (ESIP) (hereinafter referred to as ESOP Scheme). It was stated that the shares were issued below market pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom a perusal of section 37(1) of the Income-tax Act, 1961 it is evident that the provision permits deduction of expenditure laid out or expended and does not contain a requirement that there has to be a payout. If an expenditure has been incurred, section 37(1) of the Act would be attracted. Section 37 does not envisage incurrence of expenditure in cash. An assessee is entitled to claim deduction under the provision if the expenditure has been incurred. It is well settled in law that if a business liability has arisen in the accounting year, it is permissible as deduction, even though, the liability may have to be quantified and discharged at a future date. Section 2(15A) of the Companies Act, 1956, defines "employees stock option" to mean option given to whole time directors, officers or the employees of the company, which gives such directors, officers or employees, the benefit or right to purchase or subscribe at a future rate to securities offered by the company at a pre-determined price. In an employees stock option plan a company undertakes to issue shares to its employees at a future date at a price lower than the current market price. The employees are given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the provisions of section 37 of the I.T. Act (though there was some discussion in the draft assessment order with reference to disallowance u/s. 40(a)(i) of the I.T. Act). Therefore, grounds 2.1 to 2.8 are allowed and ground 2.9 to 2.15 is not adjudicated. Grounds 3 to 3.3 (Corporate Tax Issues) 22. The facts pertaining to grounds 3 to 3.3 are that during the Financial Year 2015-2016, it is claimed that the assessee had made payment towards leave encashment of Rs. 7,59,06,267 and the same was disclosed as part of Clause 26 of Tax Audit Report ("TAR") filed in Form 3CD for the said FY. Though the assessee was eligible to claim Rs. 7,59,06,267 under section 43B of the Act, the assessee had not claimed the payment towards leave encashment in the return of income by the assessee for the reason that during the FY 2006-07 to FY 2012-13, the assessee by placing reliance on the judgment of Hon'ble Calcutta High Court in case of Exide Industries v. Union of India [2007] [164 taxman 9], had claimed deduction towards provision of leave encashment on accrual basis despite specific provisions of section 43B(f) of the Act which provides for deduction only on the basis of act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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