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of <h1>ITAT Jaipur allows appeal, deletes disallowance of pay revision provision. Employees entitled to revised pay.</h1> <h3>Erstwhile Rajasthan Gramin Bank, Alwar C/o Baroda Rajasthan Kshetriya Gramin Bank, Ajmer Versus DCIT, Circle-1, Alwar</h3> Erstwhile Rajasthan Gramin Bank, Alwar C/o Baroda Rajasthan Kshetriya Gramin Bank, Ajmer Versus DCIT, Circle-1, Alwar - TMI Issues: Disallowance of provision for pay revisionDetailed Analysis:1. Grounds of Appeal: The appeal challenges the enhancement of disallowance from Rs. 14 lacs to Rs. 140 lacs by disallowing the entire amount of outstanding liability for Pay Revision. The appellant argues that the provision for liability towards wages revision was made based on Bipartite settlements, and the amount provided on 31.03.2010 was paid on 24.09.2010, thus not an adhoc provision.2. Assessment Proceedings: The AO observed an adhoc provision of Rs. 140.00 lacs for pay revision in the Profit & Loss account during scrutiny under section 143(3) of the IT Act, 1961. The AO disallowed Rs. 14.00 lacs of the provision as it lacked proper basis and evidence, adding it to the total income of the assessee.3. Appeal Before CIT (A): The assessee contested the AO's decision before the CIT (A), who opined that the entire adhoc provision of Rs. 140 lacs should be disallowed, citing lack of proper justification for the provision. The CIT (A) rejected the claim based on various legal precedents, enhancing the disallowance to 100%.4. Appeal Before ITAT Jaipur: The appellant appealed the CIT (A)'s decision before the ITAT Jaipur, reiterating previous submissions. The ITAT considered the ongoing pay revision process, the basis of the provision, and the settlement between the parties, ultimately setting aside the orders of lower authorities and allowing the claim of the assessee by deleting the disallowance.5. Conclusion: The ITAT Jaipur allowed the appeal, emphasizing that the provision made by the appellant for pay revision was based on settlements and agreements, and the employees were entitled to revised pay from the due and payable date. The decision was also supported by a previous judgment of the ITAT Jaipur Bench, leading to the deletion of the disallowance.This detailed analysis highlights the progression of the case from the initial assessment to the final judgment by the ITAT Jaipur, focusing on the grounds of appeal, assessment proceedings, the CIT (A)'s decision, and the final verdict of the ITAT Jaipur in favor of the assessee.
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