Accrued contractual liability for leave with wages allowed in full where the record showed crystallised obligation, not a contingent provision.

Leave with wages was treated as an accrued contractual liability where the record showed an enforceable obligation arising from the workers' understanding and contract, supported by certificates and later assessment material. The Tribunal distinguished an earlier view based on the Factories Act because the facts in the present year established contractual accrual, not a mere contingent provision. On those findings, the liability had crystallised during the relevant period and the disallowance was not justified; the claim was allowable in full.

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Issues: Whether the assessee's claim for leave with wages was deductible as an accrued contractual liability, or was merely a contingent liability not allowable for the assessment year.

Analysis: The assessee's case was that leave with wages arose from an understanding and contract with the workers and was supported by certificates and the surrounding record. The Revenue relied on an earlier view treating the claim under the Factories Act and on the absence of certificates from all workers. The Tribunal held that the earlier decision did not govern the present year because the material before it showed a contractual obligation. It also noted that the assessee had indicated readiness to furnish further evidence if required, but no such requisition had been made. On the facts found by the appellate authority, the liability had accrued during the relevant period and was not a mere contingent provision. The Tribunal also accepted that the assessee's later assessment records supported the contractual nature of the liability.

Conclusion: The claim for leave with wages was allowable in full as an accrued contractual liability, and the disallowance was not justified.

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