Ita/78/2009 Commissioner Of Income Tax Kolkata Iii Kolkata v. M/S. Ernst & Yongs Pvt. Ltd

IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITA/78/2009COMMISSIONER OF INCOME TAX KOLKATA III KOLKATAVS.M/s. ERNST & YONGS PVT. LTD. BEFORE :THE HON’BLE JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate : 8 FEBRUARY, 2023 Appearance :Mr. Smarajit Roychowdhury, Adv.…for appellantMr. J. P. Khaitan, Sr. Adv.,Mr. Akhkilesh Kr. Gupta, Adv.Mr. Asim Chowdhury, Adv.Mr. Soham Sen, Adv.…for respondent The Court : - Heard learned Counsel for either side. This appeal filed by the revenue under Section 260A of the Income Tax Act, 1961is directed against the order dated 31.10.2018 passed by the Income Tax AppellateTribunal “B” Bench, Kolkata (the Tribunal) in ITA Nos. 1056 and 1014 (Kol) of 2008 forthe assessment year 2004-05. The appeal was admitted on the following substantialquestions of law:- i)Whether, on the facts and in the circumstances of the case, the IncomeTax Appellate Tribunal is correct in deleting the disallowance ofRs.1,24,35,722/- written off as bad debts and Rs.56,63,263/- being baddebts in respect of the amounts due from the foreign concerns as theassessee could not prove that they became bad and the permission of theReserve Bank of India was not obtained as the foreign exchange wasinvolved ? ii)Whether, on the facts and in the circumstances of the case, the Income- tax Appellate Tribunal is correct in deleting the disallowance ofRs.8,01,430/- being provision for leave encashment inadmissible in termsof section 43B(f) of the Income-tax Act, 1961, as the amounts were notpaid before the due date of the submission of the return ?Rs.8,01,430/- being provision for leave encashment inadmissible in termsof section 43B(f) of the Income-tax Act, 1961, as the amounts were notpaid before the due date of the submission of the return ? It is pointed out by the learned Senior Advocate for the respondent thatrespondent cannot pursue this appeal on the ground of low- tax effect. In this regard,the relevant figures were brought to our notice. Even going by the substantial questionsof law which have been admitted for consideration, and taking note of the figuresmentioned therein it is not clear that the tax effect will be much lesser than thethreshold limit of Rs.1 crore fixed by the C.B.D.T. for the revenue to pursue this appealbefore this Court. For the above reason, the appeal stands disposed of on the ground oflow tax effect and the substantial questions of law are left open. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.)