2008 (10) TMI 335

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....-The question of law that has been raised in this tax case is as follows: "Whether, in the facts and circumstances of the case, the Tribunal was right in holding that the amount set aside as a contribution to the assessee's own insurance fund to meet future contingent liability of accidents is allowable as a revenue expenditure?" 2. This tax case is squarely covered by the decision in CIT v.....

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....ligation and the assessee is not entitled "to ask for deduction of the amount contributed to the fund as admissible revenue expenditure". This court considered the various decisions cited before it and also Associated Power Co. Ltd. v. CIT [1996] 218 ITR 195 (SC) wherein the Supreme Court held that when the provisions of the Electricity Supply Act required the electricity company to set apart a co....

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....that on facts of this case would differ and in that relevant year, the assessee had incurred a liability of Rs. 51,12,172 which represented the actual outgoing of the year by way of insurance payment and the assessee had taken into account Rs.28.88 lakhs which was in the fund and had shown only the balance as actual payment. Therefore, what is claimed is deduction of actual revenue expenditure. ....