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2013 (6) TMI 732 - AT - Income TaxCan the provision made on account of leave salary shall be allowed as deduction - Held that the provision was made on the basis of actuarial valuation - appeal filed by the revenue is allowed for statistical purposes
Issues:
1. Allowance of provision for leave salary as deduction under section 43B(f) of the Income Tax Act, 1961. Analysis: The appeal filed by the revenue was directed against the order passed by the Ld. CIT(A)-4, Mumbai for the assessment year 2007-08. The grounds of appeal challenged the CIT(A)'s decision to allow relief to the assessee regarding the provision for leave salary. The AO had added a sum under section 43B of the IT Act on account of leave encashment, out of which a net addition was made after partial allowance. The CIT(A) relied on the decision of ITAT in a previous case to grant relief to the assessee. The revenue contended that the provision for leave salary was not allowable as a deduction under section 43B(f) of the IT Act, emphasizing that the deduction should be allowed in the year of actual payment, not estimation. The Tribunal considered the arguments presented by both parties and referred to previous decisions, including one where the provisions of section 43B(f) were held to be arbitrary. The Tribunal observed that the issue had been considered in other cases and noted the stay on a judgment by the Calcutta High Court. The matter was restored back to the AO for fresh adjudication in line with the decision of the Hon'ble apex Court in a specific case. The AR of the assessee requested a similar direction for their case, which was not objected to by the DR. Consequently, the Tribunal, following a subsequent decision on a similar issue, decided to restore the issue to the file of the AO with similar directions, as requested by the AR. In conclusion, the appeal filed by the revenue was allowed for statistical purposes, and the issue regarding the provision for leave salary deduction was restored to the file of the AO for fresh adjudication in accordance with the decision of the Hon'ble apex Court in a specific case. The Tribunal pronounced the order in open court on a specified date.
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