2013 (1) TMI 814

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.... Per Chandra Poojari, Accountant Member: This appeal by the Revenue is directed against the order of the Commissioner of Income-tax(Appeals)-II Hyderabad dated 18.7.2011 for the assessment year 2007-08. 2. Effective grounds of the Revenue in this appeal read as follows- 1. The learned CIT(A) ought to have upheld the order of the Assessing Officer. 2. The learned CIT(A) ought to have apprecia....

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....d by the CIT(A), in respect of provision made for EL encashment under S.43B(f), which was actually not paid before the due date for the filing of the return. 3. We have considered the rival submissions and perused the material available on record. We find that the issue involved in this appeal is covered in favour of the assessee and against the Revenue by the order of this Tribunal dated 19th No....

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....evade statutory liability on one hand and claim appropriate benefit under the Act on the other. Under clause (f) of 43B, any sum payable by the employer to his employees as leave encashment shall be deductible only in computing the income referred to in s. 28 of that previous year in which sum is actually paid by the employer to its employees. While inserting clause (f) no special reasons were dis....

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....diture he incurs for running his business which includes payment of salary and other perquisites to his employees. Hence, it is trading liability. As such he is otherwise entitled to deduction of such amount by showing it as a provisional expenditure in his account. The Legislature by way of amendment restrict such deduction in the case of leave encashment unless it is actually paid in that partic....