Contingent liability deduction and additional plea rules shaped reconsideration of a leave-with-wages tax claim.

A contingent liability for leave with wages was deductible only to the extent of its properly discounted value, not in the full amount claimed. The Tribunal was also held not to reject an additional plea merely because it had not been raised before the lower authorities; it had to record reasons for refusing it, and an omission would justify rejection only if wilful or intentional. On that basis, the deduction claim was sent back to the Tribunal for fresh decision after considering the assessee's additional plea.

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Issues: (i) Whether the assessee was entitled to deduction of the full amount claimed under the head 'leave with wages' for the assessment year 1972-73. (ii) Whether the Tribunal was justified in refusing to entertain the assessee's additional plea regarding the discounted value of a contingent liability on the ground that it had not been raised before the lower authorities.

Issue (i): Whether the assessee was entitled to deduction of the full amount claimed under the head 'leave with wages' for the assessment year 1972-73.

Analysis: The claim related to a contingent liability and the assessee itself accepted that the entire amount could not be deducted as such. Only the discounted value of the liability could be considered, and that question depended upon the treatment of the additional plea.

Conclusion: The answer was in the affirmative and was in favour of the Revenue and against the assessee.

Issue (ii): Whether the Tribunal was justified in refusing to entertain the assessee's additional plea regarding the discounted value of a contingent liability on the ground that it had not been raised before the lower authorities.

Analysis: An additional ground cannot be rejected merely because it was not raised before the Appellate Assistant Commissioner or the Income-tax Officer. The Tribunal must give reasons for refusal, and unless the omission was wilful or intentional, the assessee should ordinarily be permitted to raise the plea.

Conclusion: The answer was in the negative and was in favour of the assessee and against the Revenue.

Final Conclusion: The deduction claim required reconsideration by the Tribunal in the light of the ruling permitting the additional plea, and the matter was sent back for fresh decision on the claim under the head 'leave with wages'.

Ratio Decidendi: An additional plea cannot be refused solely because it was not raised before the lower authorities unless the omission was wilful or intentional, and a contingent liability is deductible only to the extent of its properly discounted value.

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