Tribunal overturns CIT(A) disallowance of leave encashment & gratuity claims for assessment years 2008-09, 2009-10.

The Tribunal set aside the Ld. CIT(A)'s orders disallowing the claims for provision of leave encashment and provision of gratuity for assessment years 2008-09 and 2009-10. The Tribunal directed the AO to re-examine the issues in light of relevant court decisions and pending approvals, instructing the assessee to pursue necessary actions. The appeals filed by the revenue were treated as allowed for statistical purposes.

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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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