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TMI Blog2012 (12) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... he work and labour Union in the Industrial Sectors. The enhanced pay bill which will be assigned to them later can be provided for by the assessee in view of it not being contingent but accrued on the basis of services rendered by the recipients. The change or credit arisen out of a contingency which at the time of occurrence could not be estimated correctly shall not construe the correction or error and change of asset and as such, such item shall not be treated as disallowable u/s.37. The Revenue cannot take both the stands for declining to allow the prior period expenses in the impugned AYs nor consider crystallization of the liabilities provided in the impugned AYs for the AYs just because pay revision occurs every five years applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect to amounts charged to accounts pending finalization of the payment of salary/wages. 3. We propose to take up both the appeals together insofar as the learned Counsel for the assessee has stated that for the Assessment Year 2006-07 the issues were dealt with by the Assessing Officer and were adjudicated by the learned CIT(A) on an appeal filed by the assessee therefore stands settled for the purported error sought to brought on record by the learned CIT in his order was not any error prejudicial to the interest of revenue but a mere view taken by the learned CIT which alone cannot stand the test of assuming jurisdiction u/s.263. 4. For the Assessment Year 2007-08 however the issue being provision for salary/wages in accordance wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case on this issue. The learned CIT assuming jurisdiction uls.263 tried to arithmetically probe the actual amount to be disallowed uls.43B was lower than what has been claimed disallowable by the assessee. No useful purpose would be served as per the direction of the learned CIT to the Assessing Officer insofar as the Assessing Officer would not be able to act upon it insofar as the issue was before the learned CIT(A) who has already adjudicated the issue and has been settled by the Tribunal. The water charges in consequence thereto also became a statutory liability which has to be provided for as Government dues and not because the liability had not arisen or accrued under the mercantile system of accounting, The learned CIT therefore err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer after having applied his mind allowed the claim in the impugned Assessment Year on both these issues therefore cannot be thrust upon by t he learned CIT holding a view other than the view which was legitimately accepted by the Assessing Officer but on the basis of arithmetical finding of the learned CIT which rather leans in favour of the assessee. 6.2. With respect to the additional issue raised by the assessee in Assessment Year 2007-08, the learned Counsel for the assessee submitted that the employees salary booked to the P L account pending wage/salary revision was also dealt with by the learned CIT(A) in the past assessment years in favour of the assessee when the learned CIT(A) observed that providing for pay revis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry and wages, the assessee was yet to determine the quantum was purely a contingent liability provided for not allowable was found by the learned CIT. The earning of interest on the deposits made in the bank was a matter which the learned Counsel for the assessee has not clarified whether could be claimed as deduction by providing for it on the basis of order of the Hon ble High Court to be awarded subsequently. The deposits of amount in a bank and not with the Electricity authorities was a clears violation not considered by the Assessing Officer when he directly considered the disallowability under the provisions of Section 43B an amount which was further observed as an error by the learned CIT. She submitted that the assessing authority n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in view of it not being contingent but accrued on the basis of services rendered by the recipients. The change or credit arisen out of a contingency which at the time of occurrence could not be estimated correctly shall not construe the correction or error and change of asset and as such, such item shall not be treated as disallowable u/s.37. The Revenue cannot take both the stands for declining to allow the prior period expenses in the impugned AYs nor consider crystallization of the liabilities provided in the impugned AYs for the AYs just because pay revision occurs every five years applicable to the respective years in accordance with the price index. Therefore, we are of the considered view that the issues raised by the learned CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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