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TMI Blog1986 (8) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... aluing the closing stock of tea to garden cost or estimated realisable value whichever is lower. This method of valuing the closing stock of tea was followed by the assessee-company in the assessment year under consideration also. As in the earlier years, the ITO declined to accept this valuation and valued the closing stock of tea at the average sale price and added the resultant amount of Rs. 32,50,516 to the total income of the assessee-company. This addition was challenged by the assessee-company on appeal. 3. In the meantime, by its order dated 15-9-1984 in IT Appeal No. 368 (Cal.) of 1983 for the assessment year 1978-79, this Tribunal accepted the change in the method of valuing the closing stock of tea, and this was followed by this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d fails. 6. By ground No. 2, the assessee-company supports deletion of the addition made due to change in the valuation of closing stock of tea. We have already upheld such deletion. As such, this ground does not need further discussion. 7. By ground No. 3(a) and 3(b) the assessee-company challenges the disallowance of Rs. 28,12,778 claimed as liability for pension. In the revised return the assessee-company claimed this amount as allowable deduction on the basis of actuarial valuation of its pension liability as on 31-12-1980. The ITO noticed that no approved fund was created by the assessee-company and that it was not credited in the profit and loss account. He further noticed that in the past actual payment of pension was only allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... setting apart money which might become expenditure on the happening of an event is not expenditure. This is the rationale laid down by the Supreme Court in the case of Shree Sajjan Mills Ltd. v. CIT [1985] 156 ITR 585. It may also be mentioned that in the case of Indian Molasses Co. (P.) Ltd. v. CIT [1959] 37 ITR 66, the Supreme Court disallowed the claim for deduction of the amount paid to a trust on account of pension liability of the employer to an employee. On the basis of these two Supreme Court decisions, we are of the opinion that deduction of the amount claimed as pension liability on actuarial valuation cannot be allowed. As such, this ground also fails.
10. As a result, both the appeal and the cross-objection are dismissed. X X X X Extracts X X X X X X X X Extracts X X X X
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