DLF Home Developers Ltd., New Delhi v. ACIT, Gurgaon

ITA 2559/DEL/2013 | 2008-2009
Pronouncement Date: 31-10-2013 | Result: Dismissed

Appeal Details

RSA Number 255920114 RSA 2013
Assessee PAN AACCD5374R
Bench Delhi
Appeal Number ITA 2559/DEL/2013
Duration Of Justice 5 month(s) 30 day(s)
Appellant DLF Home Developers Ltd., New Delhi
Respondent ACIT, Gurgaon
Appeal Type Income Tax Appeal
Pronouncement Date 31-10-2013
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 31-10-2013
Assessment Year 2008-2009
Appeal Filed On 01-05-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI R. S. SYAL ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV JUDICIAL MEMBER I.T.A .NO.-2559/DEL/2013 (ASSESSMENT YEAR-2008-09) DLF HOME DEVELOPERS LTD. VS. ASSTT. CIT (SUCCESSORS TO DLF LAND LTE.) CIRCLE-1 9 TH FLOOR DLF CENTRE GURGAON. SANSAD MARG NEW DELHI.-110001 PAN: AACCD5374R (APPELLANT) (RESPONDENT) ASSESSEE BY:-SH. PRADEEP DINODIA & SH. R. K. KAPOOR ADV. REVENUE BY:-MS. NIDDI SRIVASTAVA SR. DR ORDER PER R. S. SYAL AM. THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE LD. CIT (A) ON 25.02.2013 IN RELATION TO THE AS SESSMENT YEAR 2008-09. 2 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE SUSTENANCE OF ADDITION OF RS.25 81 185/- U/S 43B(F) ON ACCOUNT OF PROVISION FOR LEAVE SALARY. BRIEFLY STATED THE FACTS OF TH E CASE THAT THE ASSESSEE DEBITED THE SAID SUM TO ITS PROFIT & LOSS ACCOUNT AND ACCORDINGLY CLAIMED DEDUCTION. THE AO DID NOT ALLOW THIS DEDUCTION AS IT WAS IN THE NATURE OF `PROVISION AN D NOT THE AMOUNT OF THE EXPENDITURE ACTUAL PAID. IN SUPPORT OF HIS D ECISION FOR NOT ALLOWING DEDUCTION THE AO RELIED ON THE PROVISION OF SECTION 43B (F). THE LD. CIT (A) APPROVED THE VIEW TAKEN BY THE AO. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS OBSERVED THAT TH E HONBLE SUPREME COURT IN BHARAT EARTH MOVERS VS. CIT (2000) 245 ITR 428 (SC) HELD THAT DEDUCTION ON ACCOUNT OF PROVISION OF LEA VE SALARY IS AVAILABLE. THE LEGISLATURE IN ITS WISDOM NULLIFIED THE EFFECT OF THIS JUDGMENT BY WAY OF INSERTION OF CLAU SE (F) TO SECTION 43B BY THE FINANCE ACT 2001 W.E.F. 1.04.2002. THE E FFECT OF THIS INSERTION IS THAT ANY SUM PAYABLE BY THE ASSESSEE A S AN EMPLOYER IN 3 LIEU OF ANY LEAVE AT THE CREDIT OF HIS EMPLOYEE IS DEDUCTIBLE ONLY ON ACTUAL PAYMENT. PER CONTRA A MERE PROVISION WITHO UT ACTUAL PAYMENT IS NOT ELIGIBLE FOR DEDUCTION. SINCE WE ARE DEALING WITH AY 2008-09 THE AMENDMENT BY WAY OF INSERTION OF CL AUSE (F) W.E.F. AY 2002-03 WOULD SQUARELY APPLY TO THE POSIT ION OBTAINING BEFORE US. 4. THE LD. AR CONTENDED THAT THIS AMENDMENT IS UNCONSTITUTIONAL AND HENCE SHOULD NOT BE ACTED UPON . IN SUPPORT OF THIS SUBMISSION HE RELIED ON THE JUDGMENT OF THE H ONBLE CALCUTTA HIGH COURT IN EXIDE INDUSTRIES LTD. AND ANOTHER VS. UNION OF INDIA AND OTHERS 2007-TIOL-429-HC-KOL IT . IN THIS JUDGMENT THE HONBLE CALCUTTA HIGH COURT HAS HELD THE AMENDM ENT TO SECTION 43B BY WAY OF INSERTION OF CLAUSE (F) AS UNCONSTITUTIONAL. HOWEVER IT IS IMPORTANT TO NOTE THAT THE HONBLE S UPREME COURT VIDE ITS JUDGMENT DATED 8.5.2009 IN CIT VS. EXIDE INDUSTRIES LTD. AND ANOTHER HAS STAYED THE OPERATION UNTIL FURTHER ORDERS OF TH E HONBLE CALCUTTA HIGH COURT JUDGMENT IN EXIDE INDUS TRIES. IT HAS FURTHER BEEN HELD BY THE HONBLE SUPREME COURT THAT : ` THE ASSESSEE WOULD DURING THE PENDENCY OF THIS CIVIL A PPEAL PAY TAX 4 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. 5. THE RELIANCE ON THE LD. AR ON THE OTHER SI MILAR JUDGMENT OF THE HONBLE KERALA HIGH COURT IN CIT VS. HINDUSTAN LETEX (2012) TIOL 484 HC KERALA IT IS AGAIN MISCONCEIVED BECAUSE THE HONBLE KERALA HIGH COURT HAS SOLELY RELIED ON THE JUDGMENT OF THE HONBLE CALCUTTA HIGH COURT IN EXIDE INDUSTRIES LTD. (SUPRA) BY FURTHER NOTING IN PARA 5 THAT THE THERE IS NO CHALLENGE MADE TO THE SUPREME COURT FROM THE AFORESAID DECISI ON BY THE DEPARTMENT; THERE IS NOTHING MENTIONED ABOUT ANY SU CH CHALLENGE IN THE APPEAL MEMORANDUM. IT IS RELEVANT TO NOTE THAT THOUGH THE HONBLE KERALA HIGH COURT RENDERED ITS JUDGMENT IN THE YEAR 2012 BUT THE FACT OF THE HONBLE SUPREME COURT HAVING ST AYED THE JUDGMENT IN EXIDE INDUSTRIES LTD. (SUPRA) WHICH WAS THE SOLITARY BASIS FOR ITS DECISION WAS NOT BROUGHT TO THE NOTI CE OF THEIR LORDSHIPS. IN VIEW OF THE CLEAR ENUNCIATION OF LAW BY THE HONBLE SUPREME COURT WE ARE OF THE CONSIDERED OPINION THA T THE 5 DEDUCTION U/S 43B (F) CANNOT BE ALLOWED ON THE MAKI NG OF A MERE PROVISION UNLESS THE AMOUNT IS ACTUALLY PAID. AS TH E ASSESSEE HAS ADMITTEDLY NOT MADE THE PAYMENT OF THE AMOUNT IN QU ESTION AND CLAIMED DEDUCTION ON THE BASIS OF PROVISION WE ARE OF THE CONSIDERED OPINION THAT THE VIEW OF THE LD. CIT(A) CANNOT BE TINKERED WITH. WE THEREFORE UPHOLD THE IMPUGNED ORDER ON THIS ISSUE. 6. IN THE RESULT APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/10/2013. SD/- SD/- ( RAJPAL YADAV ) (R. S. SYAL) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED: 31/10/2013 *AK VERMA* 6 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTR DATE INITIAL 1. DRAFT DICTATED ON 31-10-2013 PS 2. DRAFT PLACED BEFORE AUTHOR 31-10-2013 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. *