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2014 (3) TMI 1004 - ITAT HYDERABADDisallowance of EL encashment u/s 43B(f) - amount actually paid before the due date for filing the return of income - Held that:- The issue in dispute is squarely covered by the decision of the coordinate bench of ITAT, Hyderabad in assessee’s own case for AY 2008-09 wherein the Tribunal dismissed the appeal of the revenue following the decision of the another coordinate bench decision assessee’s own case for AY 2005-06 to held that an employer is entitled for deduction for the expenditure he incurs for running his business which includes payment of salary and other perquisites to his employees. Hence, it is trading liability. As such he is otherwise entitled to deduction of such amount by showing it as a provisional expenditure in his account. The Legislature by way of amendment restrict such deduction in the case of leave encashment unless it is actually paid in that particular financial year. The legislature is free to do so after it discloses reasons there for and such reasons are not inconsistent with the main object of the enactment. Without such reason the enactment is inconsistent with the original Provision. The legislature must disclose reasons which would be consistent for the provision of the constitution and the laws of the land and not for the sole object of nullifying the judgment in the case of Bharat Earth Movers vs. CIT (2000 (8) TMI 4 - SUPREME Court) wherein held the provisions made on account of leave encashment should be allowed although the liability may have to be quantified and discharged at a future date - Decided against revenue.
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