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TMI Blog2013 (12) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... Decided in favour of assessee. Premium of leave encashment – Held that:- Following CIT vs Hindustan Latex Ltd. [2012 (6) TMI 713 - KERALA HIGH COURT] - Leave encashment is not a statutory liability and even in the case of provision being made the deduction was allowed as a business expenditure - It was not a provision which was disowned but an actual liability towards premium paid on insurance policy and the liability was allowable as a deduction u/s 37 being an expenditure incurred for the purpose of business – Decided in favour of assessee. - ITA No. 351/JU/2012 - - - Dated:- 19-2-2013 - Shri Hari Om Maratha And Shri N. K. Saini,JJ. For the Appellant : Shri S. K. Bissar For the Respondent : Shri G. R. Kokani ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ials available on record, it is noticed that similar issue has been decided by the coordinate bench in the aforesaid referred to case of ACIT vs Rajasthan State Cooperative Bank Ltd., Jaipur. In the said case on similar issue, the addition was deleted by the ld. CIT(A) by observing as under:- Allowability of contribution by the Apex Bank for PAC Mangers salary is a statutory liability which is crystallized at the end of every year. The contribution however, once made become at the disposal of Registrar of Cooperative Society which is payable as and when demanded by the Registrar Cooperative Society alongwith interest on it. Thus, it is not contingent liability but a statutory liability which is crystallized at the end of every year and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, clear that funds stand diverted at the source and therefore, this cannot be considered as an appropriation of income but it is an expenditure. Thus the ld. CIT(A) was justified in deleting the addition. 2.8 Since the facts of the present case are similar to the facts involved in the aforesaid referred to case, so respectfully following the order dated 22-07-2011 of the ITAT Jaipur bench in ITA 1277JP/2010 for the assessment year 2007-08 in the case of ACIT vs Rajasthan State Cooperative Bank Ltd., Jaipur, the addition made by the AO and sustained by the ld. CIT(A) is deleted. 3.1 The next issue relates to the sustenance of addition made by the AO on account of premium of 47 employees of leave encashment amounting to Rs. 26,52 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the assessee at the very outset stated that this issue is covered by the decision of the Hon'ble Kerala High Court in the case of CIT vs Hindustan Latex Ltd. 209 Taxman 42 (Kerala). The copy of the said order was also furnished. 3.6 In his rival submissions, the ld. DR supported the orders of the authorities below. 3.7 After considering the submissions of both the parties and the materials available on record, it is noticed that on the similar issue the Hon'ble Kerala High Court in the case of CIT vs Hindustan Latex Ltd. (supra) has held as under:- Leave encashment is not a statutory liability and even in the case of provision being made the deduction was allowed as a business expenditure, when the liability was not actually i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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