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TMI Blog2013 (12) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... debit the P and L account but simultaneously also reduce the loans and advances or the debtors from the assets side of the balance sheet – Decided against Revenue. Provision for gratuity and leave encashment – Held that:- Following Bharat Earth Movers Vs. Commissioner Of Income Tax Reported [2000 (8) TMI 4 - SUPREME Court] - An assessee who is maintaining the accounts on mercantile system, a liability already accrued, though to be discharged at a future date, would be a proper deduction while working out the profits and gains of his business – Keeping in view the accepted principles of commercial practice and accountancy - The liability would be an accrued liability and would not convert into a conditional one merely because the liability w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34B and 234C of the Act cannot be levied for default in payment of advance tax in the case wherein Section 115JB of the Act is invoked? e. Whether the Tribunal was correct in holding that though the assessee assessed u/s. 115JB of the Act is liable for payment of advance tax however not liable for payment of interest u/s.234B and 234C of the Act? 2. The Apex Court in the case of VIJAYA BANK Vs. COMMISSIONER OF INCOME TAX & ANOTHER reported in 323 ITR 166 has held that the assessee is entitled to the benefit of rejection under Section 36(1)(vii) of the Income Tax Act, 1961 (for short 'the Act') when there is an actual write off by the assessee in its book. This Court in the case of COMMISSIONER OF INCOME TAX VS. YOKOGAWA INDIA LTD., repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... working out the profits and gains of his business, regard being had to the accepted principles of commercial practice and accountancy. It is not as if such deduction is permissible only in case of amounts actually expended or paid. The liability would be an accrued liability and would not convert into a conditional one merely because the liability was to be discharged at a future date. Therefore for that reason it was held that the gratuity payable and encashment of earned leave is not a contingent liability and provision thereof is deducted. In the light of the settled principles laid down by the Apex Court, no substantial questions of law arise for consideration in this appeal. Accordingly, the appeal is dismissed. X X X X Extracts X X X X X X X X Extracts X X X X
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