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TMI Blog1990 (3) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... contingency reserve account is not liable to deduction in arriving at the taxable income of the assessee-company ? (b) Whether having regard to the provisions of the Electricity (Supply) Act, 1984 and the provision of the Sixth Schedule hereto the amount of ₹ 1,72,743 transferred to contingency reserve account constitutes income in the hands of the assessee ? (c) Whether the amount covered by the contingency reserve is a diverse of income by reason of overriding obligation created by the statute ? 2. (a) Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was justified in holding that the accrued liability for pensipn valued actuarially was not an admissible deduction in computing the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability arose only on retirement or happening of similar event and thereafter the liability continued in the form of actual payment made to the person concerned. It was further held by the Commissioner (Appeals) that the company had not withdrawn its claim to get deduction on the basis of actual claim because, in fact, it had pressed its actual claim in this year also. Under the circumstances, the Commissioner (Appeals) held that it was not open to the company to claim deduction on both the basis. This view was also upheld by the Tribunal holding, inter alia, as follows: "It was, however, admitted that no funds were created for this purpose. The CIT (Appeals) was of the view that though the pension may be given considering the past ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, the company would get the deduction as and when such sums were actually paid to the employees. In our view, therefore, the Tribunal has rightly decided the question. 5. In this connection a reference was made to a decision of this Court in the case of CIT v. National Insurance Co. of India [1981] 127 ITR 54. In that case, it was held that the person in respect of whom provision for pension was made had already retired and there was an existing liability under the terms of his employment. Further, existing liability was actuarially computed and thereafter the provision for pension represented accrued liability and was an admissible deduction in computing the profits of the assessee for that assessment year. In that case, only one method ..... X X X X Extracts X X X X X X X X Extracts X X X X
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