9911796707
TMI Blog1989 (4) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... e circumstances of the case, the CIT (Appeals) erred in not recording the reasons as required mandatorily under rule 46A(2) of the IT Rules. 2. On the facts and in the circumstances of the case, the CIT (Appeals) erred in taking cognizance of the actuarial report before getting it examined by the expert. 3. On the facts and in the circumstances of the case, the CIT (Appeals) erred in relying on the actuarial report which is based on surmises, conjectures and suppositions not supported by any material on record. 4. On the facts and in the circumstances of the case, the CIT (Appeals) erred in admitting and relying on actuarial report while there can be no actuarial valuation regarding the liability for payment of leave salary." The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mployee at the time of any of the aforesaid relevant events and is restricted to the maximum number of days for which leave can be accumulated. Up to the assessment year 1981-82, the assessee was claiming expenditure on account of payment of leave encashment on the basis of actual payments made during the relevant accounting year. In the year under consideration, however, the assessee made a provision in a sum of Rs. 22,58,000 on account of alleged liability for the payment of encashment of leave in future. The ITO disallowed the alleged liability on the ground that the liability had not been determined by any actuary, no contribution towards the scheme had been made by the assessee during the year and, there was no statutory liability cast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulated leave to the extent of 120 days could be encashed at the time of retirement or the termination of the service and this was, therefore, a contingent liability and provision for leave wages was not deductible. In that case also, reliance was placed by the assessee on the ratio in the case of Metal Box Co. of India Ltd. and the Hon'ble High Court held that the ratio laid down by the Supreme Court had no application in the case. Regarding the determination of the extent of liability by an actuary, the Hon'ble High Court observed that there can be no actuarial valuation regarding the liability for payment of leave, wages and it cannot be equated with gratuity liability under the Gratuity Act. Similar views were taken by the Hon'ble Andhra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, the decision in the case of Bharat Commerce Industries cannot be followed. This Tribunal's decision in Delton Sales (P.) Ltd.'s case, is also based on the ruling in the case of Metal Box Co. of India Ltd. and the judgment of this Tribunal in the case of Bharat Commerce Industries. None of the three authorities of the Calcutta, Andhra Pradesh and Karnataka High Courts were cited before the Bench and, therefore, this order of the Tribunal too cannot help the assessee. 9. As already stated the assessee filed a report which is said to be a report by an actuary determining the present liability as on 31-3-1982 at Rs. 18,64,000. A copy of the actuary's report has been placed at pages 127 and 128 of the paper book and a perusal thereof w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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