Principal Commisioner Of Income ... vs M/S. Akzo Noble India Limited
2021 Latest Caselaw 1531 Cal/2

Form No.(J2)
                    IN THE HIGH COURT AT CALCUTTA
                   SPECIAL JURISDICTION (INCOME TAX)
                             ORIGINAL SIDE


Present :

The Hon'ble JUSTICE T. S. SIVAGNANAM

                  AND

The Hon'ble JUSTICE HIRANMAY BHATTACHARYYA



                           ITAT No. 151 of 2017
                               Arising out of
                            IA No. GA 2 of 2017
                         (Old No. GA 1323 of 2017)

         PRINCIPAL COMMISIONER OF INCOME TAX-4, KOLKATA
                               VS.
                  M/S. AKZO NOBLE INDIA LIMITED


                                              Mr. Debasis Choudhury, Advocate
                                                    Mr. Madhu Jana, Advocate
                                                            ... for the appellant

                                                    Mr. Vishal Karla, Advocate
                                                 Mr. Avra Mazumder, Advocate
                                                         ... for the respondent

Heard on : 07.12.2021

Judgment on : 07.12.2021

T. S. SIVAGNANAM, J.: This appeal by the Revenue filed under

Section 260A of the Income Tax Act, 1961 (the Act in brevity) is directed

against the composite order dated 27th November, 2015 passed by the Income

Tax Appellate Tribunal, "B" Bench Kolkata in ITA Nos. 850 and

1021/Kol/2007 and ITA Nos. 2048 and 2355/Kol/2005 for the assessment

year 1996-97. The Revenue has raised the following substantial questions of

law for consideration :

1. Whether on the facts and in the circumstances of the case, the

Learned Tribunal erred in law in allowing the deduction of

liability on account of the provision of leave encashment which

has not fallen due within the financial year 1995-1996

corresponding to Assessment Year 1996-1997?

2. Whether on the facts and in the circumstances of the case, the

Learned Tribunal erred in allowing the deduction of Voluntary

Retirement Scheme (VRS) payments which is payable in future

years and not crystallized expenditure of this year is in the

nature of provision to meet the future liability?

3. Whether on the facts and in the circumstances of the case, the

Learned Tribunal erred in holding the consideration received on

sale proceeds of assessee's chemical undertaking is not liable to

tax as short term capital gain under Section 50 of the Income Tax

Act or as long term capital gain?

We have heard Mr. Jana, learned standing counsel appearing for

the Revenue and Mr. Vishal Karla, learned counsel assisted by Mr. Mazumder

for the respondent/assessee.

So far as substantial questions of law Nos. 1 and 2 are concerned,

the Tribunal rightly took note of the decision of the Hon'ble Supreme Court in

Metal Box Company of India Ltd. Vs. Workmen (1969) 73 ITR 53 SC which

was followed by the Hon'ble Supreme Court in Bharat Earth Movers Vs. CIT

[2000] 245 ITR 428 SC. Therefore, we find there is no error in the order

passed by the Tribunal. Hence, question Nos. 1 and 2 are decided against the

Revenue. In so far as substantial question of law No. 3 is concerned, in

assessee's own case in ITAT 31 of 2018 dated 24th November, 2021, we have

dismissed the Revenue's appeal and decided the question in favour of the

respondent/assessee. Thus, following the said decision, the substantial

question No. 3 is also answered against the Revenue. In the result, the

appeal filed by the Revenue is dismissed and all the three substantial

questions of law are answered against the Revenue.

Consequently, stay application stands dismissed.

(T. S. SIVAGNANAM, J.)

I agree.

(HIRANMAY BHATTACHARYYA, J.)

GH/RS