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| The Tax Publishers2020 TaxPub(DT) 1250 (Ctk-Trib) INCOME TAX ACT, 1961
Section 37(1)
Provision towards pay revision debited to the P&L Account was an ascertained liability crystallized in the year under consideration though liability might have been quantified and discharge at a future date. Accordingly, liability was not a contingent one and was, therefore, deductible.
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Business expenditure - Provision towards pay revision - AO treated the same as contingent liability -
Assessee made a provisions of Rs. 282 lakh towards revision of pay and debited the same to profit and loss account. AO held that same being purely a contingent and unascertained liability was not admissible as deduction. Held: Provision towards pay revision debited to the P&L Account was an ascertained liability crystallized in the year under consideration though liability might have been quantified and discharge at a future date. Accordingly, liability was not a contingent one and was, therefore, deductible.
Relied:Haryana Agro Industries Corporation Ltd. (2017) 391 ITR 127 (P&H) : 2017 TaxPub(DT) 0517 (P&H-HC) and Bharat Heavy Electrical Ltd. (2013) 245 ITR 428 (Del) : 2013 TaxPub(DT) 0368 (Del-HC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2009-10
INCOME TAX ACT, 1961
Section 36(1)(vii)
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