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<h1>High Court rules for assessee, deletes liability for unpaid leave wages citing precedent cases.</h1> The High Court ruled in favor of the assessee, deleting an addition for liability towards unpaid leave with wages due to workers not availing leave, ... Treatment of unavailed leave wages for tax purposes - addition to income on account of unpaid liability - accrual versus payment-liability contingent on employee availing leave - application of binding precedentsTreatment of unavailed leave wages for tax purposes - addition to income on account of unpaid liability - accrual versus payment-liability contingent on employee availing leave - Deletion of the addition made for liability towards leave with wages which was not paid during the year as the workers did not avail of the leave was justified. - HELD THAT: - The Tribunal's deletion of the addition was upheld. The High Court applied the ratio of earlier decisions including Bharat Earth Movers v. CIT and the Oswal Woollen Mills decisions, which were accepted by the Revenue during hearing. Those precedents govern the tax treatment of liabilities for leave wages not actually availed by employees, indicating that such contingent/unavailed liabilities should not be added to the assessee's income for the year. On that basis the addition of Rs. 1,51,552 on account of unpaid leave wages was not warranted and was rightly deleted by the Tribunal.Question answered in favour of the assessee and against the Revenue; the Tribunal was justified in deleting the addition.Final Conclusion: The reference is answered in favour of the assessee applying the cited precedents; the addition for unpaid/unavailed leave wages is deleted and the Revenue's appeal fails. The High Court of Punjab and Haryana ruled in favor of the assessee, deleting an addition of Rs. 1,51,552 for liability towards leave with wages not paid as workers did not avail leave. The decision was based on precedent cases Bharat Earth Movers v. CIT, CIT v. Oswal Woollen Mills Ltd., and CIT v. Oswal Woollen Mills Ltd. (No. 2).
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