Wage revision provision deductible as per Tribunal ruling

The Tribunal upheld the decision of the Ld. Commissioner of Income Tax (Appeals) to allow the provision for wage revision as a deduction, citing the judgment of the Hon'ble Apex Court. The Tribunal dismissed the Revenue's appeal, emphasizing that the liability for wage revision had crystallized and was not contingent.

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Issues involved: Disallowance of provision for wage revision made by the Assessing Officer.

Summary:
The appeal by the Revenue was against the order of the Ld. Commissioner of Income Tax (Appeals) regarding the disallowance of a provision for wage revision. The Assessing Officer disallowed Rs. 1,13,58,312 made by the assessee on account of the provision for wage revision. The assessee claimed that the provision was made based on a reasonable estimate and the liability had definitely arisen. The Ld. Commissioner of Income Tax (Appeals) held that the provision made by the appellant for wage revision during the relevant year was an allowable deduction, citing the judgment of the Hon'ble Apex Court in the case of Bharat Earth Movers vs. C.I.T. The Revenue appealed against this decision.

Upon hearing the contentions, the Tribunal noted that the liability for wage revision had crystalized and was not contingent. Referring to the judgment in the case of Bharat Earth Movers vs. C.I.T., the Tribunal upheld the decision of the Ld. Commissioner of Income Tax (Appeals) and dismissed the appeal filed by the Revenue.

In conclusion, the Tribunal upheld the decision of the Ld. Commissioner of Income Tax (Appeals) to allow the provision for wage revision as a deduction, based on the judgment of the Hon'ble Apex Court.

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