2014 (7) TMI 122

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....R Per N.R.S. Ganesan (JM) This appeal of the assessee is directed against the order of Commissioner of Income-tax(A)-IV, Kochi dated 29-10-2009 and pertains to assessment year 2005-06. 2. The only issue arises for consideration is disallowance of Rs. 2,74,000 towards provision for leave encashment. 3. Shri P Venugopal, the ld.representative for the assessee submitted that the provision....

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.... required by the statute. 4. On the contrary, Smt. T.R. Prasannakumari, the ld.DR submitted that book profit computed u/s 115JB has to be adjusted as provided in section 115JB. Provision for leave encashment is a contingent liability. Therefore, it is to be added / increased to the profit computed. According to the ld.DR, even though a provision was made, the liability to pay the leave encashme....

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....y under the leave encashment scheme proportionate with entitlement earned by employees of the company inclusive of officers and the staff subject to ceiling of accumulation as applicable on the relevant date is entitled to deduction out of the gross receipt for the accounting year during which the provision is made for the liability. The Apex Court specifically observed that the liability is not a....