ITO 8()-2, MUMBAI v. M/S. SUBHASH SILK MILLS LTD., MUMBAI

ITA 5966/MUM/2008 | 2005-2006
Pronouncement Date: 21-05-2010 | Result: Dismissed

Appeal Details

RSA Number 596619914 RSA 2008
Bench Mumbai
Appeal Number ITA 5966/MUM/2008
Duration Of Justice 1 year(s) 7 month(s) 21 day(s)
Appellant ITO 8()-2, MUMBAI
Respondent M/S. SUBHASH SILK MILLS LTD., MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 21-05-2010
Date Of Final Hearing 11-05-2010
Next Hearing Date 11-05-2010
Assessment Year 2005-2006
Appeal Filed On 30-09-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI BEFORE SHRI R.S.SYAL AM AND SHRI VIJAY PAL RAO JM ITA NO.5966/MUM/2008 : ASST.YEAR 2005-2006 THE INCOME TAX OFFICER WARD 8(3)-2 MUMBAI. VS. M/S.SUBHASH SILK MILLS LIMITED 89 GAUTAM COMPLEX SECTOR-11 CBD BELAPUR NAVI MUMBAI 400 614. PA NO.AAACS9966J. (APPELLANT) (RESPONDENT) APPELLANT BY : DR.ANIL KUMAR SINGH RESPONDENT BY : SHRI SHEKHAR GUPTA O R D E R PER R.S.SYAL AM : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 23.7.2008 I N RELATION TO THE ASSESSMENT YEAR 2005-2006. 2. THE ONLY ISSUE RAISED IS AGAINST THE GRANTING OF DEDUCTION CLAIMED BY THE ASSESSEE U/S.35D AMOUNTING TO RS.1 50 96 560 ON THE GROUND THAT SUCH DEDUCTION WAS ALLOWABLE U/S.35DDA OF THE ACT. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE CLAIMED DEDUCTION OF RS.1.50 CRORE AND ODD U/S.35D. THE ASSESSEE WAS ASKED TO FURNISH DETAILS ON THE PERUSAL OF WHICH I T WAS NOTICED THAT THESES WERE NOT PRELIMINARY EXPENSES U/S.35D BUT EXPENSES INCURRED ON VRS OF EMPLOYEES WHICH AMOUNTING TO RS.7 54 37 803. THE ASSESSEE CLAIMED B EFORE THE A.O. THAT 1/5 TH OF SUCH VRS EXPENSES AMOUNTING TO RS.1.50 CRORE BE ALL OWED AS DEDUCTION U/S.35DDA. THE ASSESSING OFFICER NOTED THAT THERE W AS NO VOLUNTARY RETIREMENT SCHEME AS SUCH AND IT WAS ONLY MUTUALLY AGREED THAT ALL THE EMPLOYEES WILL VOLUNTARILY RESIGN FROM RESPECTIVE SERVICE AS THE A SSESSEE-COMPANY HAD SOLD ITS LAND BUILDING MACHINERY ETC. AND WAS AT THE THRES HOLD OF CLOSURE. IN THE OPINION OF THE A.O. IT WAS IN FACT COMPULSORY RETIREMENT RA THER THAN VRS. ACCORDINGLY ITA NO.5966/MUM/2008 M/S.SUBHASH SILK MILLS LIMITED. 2 DISALLOWANCE WAS MADE FOR THIS SUM WHICH IN THE FI RST APPEAL CAME TO BE OVERTURNED AGAINST WHICH THE REVENUE HAS COME UP BEFORE US. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS FOUND THAT THE ASSESSEE-COMPANY BECAME SICK INDUSTRIAL COMPANY AND WAS REGISTERED UNDER BIFR. WRIT PETITION WAS FILED BY SHRI B.TRIPATHI ON BEHALF OF THE EMPLOYEES OF THE COMPANY BEFORE THE HONBLE HIG H COURT AND THEREAFTER MEMORANDUM OF UNDERSTANDING WAS SIGNED ON 26.4.2004 WHICH WAS APPROVED BY THE HONBLE HIGH COURT VIDE ITS JUDGMENT DATED 20.1 .2005. IN TERMS OF THE JUDGMENT THE ASSESSEE WAS REQUIRED TO PAY THE DUE T O THE WORKERS. THIS FACTUAL FINDING RECORDED BY THE LEARNED CIT(A) HAS NOT BE C ONTROVERTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. IN VIEW OF THESE FACTS IT BECOMES APPARENT THAT THE ASSESSEE PAID A TOTAL SUM OF RS.7.54 CRORE UNDER VO LUNTARY SCHEME TO ITS EMPLOYEES AND 1/5 TH OF THE SAID SUM WAS CLAIMED AS DEDUCTION AMOUNTING TO RS.1.50 CRORE U/S.35D IN THE CURRENT YEAR. NO DOUBT THERE WAS WRO NG MENTIONING OF SECTION UNDER WHICH THE DEDUCTION WAS CLAIMED AS SEC. 35D BUT TH E SUBSTANCE OF MATTER IS DEDUCTION U/S 35DDA WHICH IN OUR CONSIDERED OPINIO N HAS BEEN RIGHTLY ALLOWED BY THE LEARNED CIT(A). 4. IN THE RESULT THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON THIS 21 ST DAY OF MAY 2010. SD/- SD/- ( VIJAY PAL RAO ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT M EMBER MUMBAI : 21 ST MAY 2010 . DEVDAS* ITA NO.5966/MUM/2008 M/S.SUBHASH SILK MILLS LIMITED. 3 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENTS. 3. THE CIT CONCERNED 4. THE CIT(A)-XXIX MUMBAI. 5. THE DR/ITAT MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI.