Income Tax Appeal Case Between DCIT and Havells India Ltd. (ITA No. 1720/DEL/2022) Dismissed for A.Y. 2017-18
Date of Pronouncement: 25.05.2023
Introduction
This detailed article delves into the proceedings and final judgment of the Income Tax Appellate Tribunal Delhi Bench ‘B’, regarding ITA Nos. 1719 & 1720/Del/2022 for the assessment years 2015-16 & 2017-18. The appellant in the case is the Deputy Commissioner of Income Tax, Central Circle – 17, New Delhi (DCIT), and the respondent is Havells India Ltd., a prominent company engaged in the manufacturing of electronic appliances.
Background
The contention centers around the appeals filed by the Revenue against the order dated 27.05.2022 passed by the Commissioner of Income Tax (Appeals) – 27, New Delhi, for the Assessment Years 2015-16 & 2017-18. Initially, a search and seizure operation under section 132 of the Income Tax Act was conducted on the Havells Group, leading to a subsequent notice under section 153A. The crux of the dispute revolves around the deductions claimed for the ‘Shahenshah Scheme,’ treated as a contingent liability by the AO but was deleted by the CIT(A), echoing decisions in favor of Havells India from previous years on similar matters.
Arguments and Proceedings
Both parties presented their arguments, with the Revenue challenging the deductibility of the ‘Shahenshah Scheme’ provisions, asserting these were contingent in nature and hence, not permissible as deductions. On the contrary, Havells India, supported by previous tribunal decisions in its favor, stood its ground on the admissibility of these claims. The tribunal’s analysis and decision involved a thorough examination of the contentious provision, with references to similar past cases and the application of judicial precedents.
Conclusion and Analysis
After meticulous consideration, the Tribunal dismissed the Revenue’s appeals for both assessment years, upholding the decisions in favor of Havells India Ltd. This outcome not only reaffirmed the precedent regarding the treatment of such provisions but also illustrated the Tribunal’s stance on consistency and adherence to past rulings in similar cases. The decision is pivotal, shedding light on intricate aspects of contingent liabilities and their treatment under the Indian Income Tax Act.
