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TMI Blog2014 (3) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... gard to the disallowance of EL encashment of Rs. 1,02,98,507/- u/s 43B(f) of the IT Act, 1961 as it was actually paid before the due date for filing the return of income. 3) The ld. CIT(A) ought to have noticed that the Hon'ble Supreme Court of India admitted SLP file against Kolkata High Court decision in the case of Exide Industries and another 292 ITR 470 and hence should have upheld the disallowance u/s 43B(f) of the IT Act. 4) The ld. CIT(A) ought to have noticed that the matter has not reached finality and hence should have kept the issue pending." 2. Briefly the facts of the case are that the assessee debited an amount of Rs. 1,02,98,507/- to the P&L A/c under the head 'Earned Leave Encashment". During the assessment proceedings, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue following the decision of the another coordinate bench decision assessee's own case for AY 2005-06 in ITA No. 1442/Hyd/09. The relevant findings of the coordinate bench in AY 2005-06 are as follows: "5. We have gone through above judgment and it was observed in this judgement that the original section 43B in IT Act 1961, the intention of which was to curb unreasonable deduction on the basis of mercantile system of account without discharging statutory liability. It was observed by the legislature, that such enactment was necessary as there had been trend to evade statutory liability on one hand and claim appropriate benefit under the Act on the other. Under clause (f) of 43B, any sum payable by the employer to his employees as leav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons there for and such reasons are not inconsistent with the main object of the enactment. Without such reason the enactment is inconsistent with the original Provision. The legislature must disclose reasons which would be consistent for the provision of the constitution and the laws of the land and not for the sole object of nullifying the judgment in the case of Bharat Earth Movers vs. CIT (245 ITR 428) (SC). 6. As discussed above, Section 43B(f) already struck down by the Calcutta High Court in the judgement cited supra and as per judgment of the Supreme Court in the case of Bharat Earth Movers Ltd. (supra), the provisions made on account of leave encashment should be allowed although the liability may have to be quantified and discharg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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