Case Law Details
Mercury Car Rentals Pvt. Ltd. Vs DCIT (ITAT Kolkata)
It is noted that the provisions in respect of gratuity, leave encashment, ex-gratia & bonus were created on actuarial basis and had been estimated with reasonable certainty. Accordingly such provisions cannot be said to be provisions of unascertained liabilities so to add it back under clause (c) of the Explanation to section 115JB(2). Since these provisions are in the nature of ascertained liabilities, I am of the considered view that the same is allowable while computing book profit u/s 11 5JB of the I.T. Act.
FULL TEXT OF THE ITAT JUDGMENT
This appeal has been preferred by the assessee against the order of the Ld. Commissioner of Income-tax (Appeals)-2, Kolkata [‘Ld. CIT(A)] dated 1 1.04.2018for the Assessment Year 2012-13.
2. The first ground of appeal is against the Ld. CIT(A)’s order confirming the disallowance of lease rentals of Rs.21,57,334/- holding it to be excess/double deduction claimed in the computation of income. Briefly stated the facts of the case are that the appellant company is engaged in the business of rendering car rental services. In the assessment completed u/s 143(3), the AO had disallowed the claim for lease rentals of Rs.21,57,334/- paid by the appellant in respect of the cars used by their employees. The AO had noted that the staff welfare expenses of Rs.2,20,37,335/- incurred by the appellant company had already been debited to the P&L A/c and in that view of the matter he held that the separate claim for deduction of lease rentals of Rs.21,57,334/- made by the appellant in computation of income was an excessive / double claim since in AO’s view such expenditure already formed part of the staff welfare expenses of Rs.2,20,37,335/- debited in P&L A/c. On appeal the Ld. CIT(A) confirmed the disallowance on the ground that the appellant was unable to provide any cogent evidence that it was not an excessive deduction claimed in the return of income. Aggrieved, the appellant is now in appeal before us.
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