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of <h1>Tribunal overturns CIT(A) disallowance of leave encashment & gratuity claims for assessment years 2008-09, 2009-10.</h1> <h3>The Assistant Commissioner of Income-tax, Circle-1 (1), Thrissur. Versus M/s. Kerala Feeds Ltd.,</h3> The Assistant Commissioner of Income-tax, Circle-1 (1), Thrissur. Versus M/s. Kerala Feeds Ltd., - TMI Issues involved:1. Disallowance of claim under the head 'Provision of leave encashment' and 'Provision of gratuity' for assessment years 2008-09 and 2009-10.Analysis:1. Provision for leave encashment disallowance:- The AO disallowed the claim under section 43B(f) as it was not paid by the due date. Assessee cited a Calcutta High Court decision declaring section 43B(f) unconstitutional.- The Ld. CIT(A) allowed the claim based on the Kerala High Court decision and the Calcutta High Court decision, which was not challenged by the Revenue.- The Tribunal noted that the Supreme Court stayed the Calcutta High Court judgment and directed the AO to re-examine the issue in light of the Supreme Court's decision.2. Provision for gratuity disallowance:- The AO disallowed the claim as the gratuity fund was not approved. Assessee's application for approval was pending.- The Ld. CIT(A) allowed the claim, stating that disallowance without approval was unfair.- The Tribunal directed the AO to re-examine the issue considering the fate of the application and instructed the assessee to pursue the matter with the competent authority.3. Overall Decision:- The Tribunal set aside the Ld. CIT(A)'s orders on both issues and restored them to the AO for fresh examination.- The appeals filed by the revenue were treated as allowed for statistical purposes.This detailed analysis provides a comprehensive overview of the judgment, including the arguments presented, legal references cited, and the final decision rendered by the Tribunal.
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