TaxTMI 
TaxTMI 
2015 (9) TMI 1426
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....vities of manufacturing and sale of feed, pesticides, storage of agricultural produce and trading of agricultural implements and agricultural related activities etc. For the relevant assessment year, return declaring income of Rs. 8,48,13,167/- was filed. During the course of assessment proceedings, the Assessing Officer noted that as per notes to accounts at page 48 item No.(viii) and (ix) read as under : "(viii) The State Government vide its notification dated 07.01.2009 has revised the pay scale of the employees of the State Government with effect from 01.01.2006. As per .he instruction of the State Govt. 40% arrears of the revised pay scales amounting to Rs. 106.37 Lacs were released during the year 2009-10 and for which ....
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....rears of pay scales @ 60% of the total arrears during the year under consideration. The amount comes to Rs. 204.52 lacs and a provision for this was made and a note was given in the audited accounts on accrual basis as the assessee maintains its accounts on mercantile system. The assessee also filed before the learned CIT (Appeals) and copy of letter from Financial Commissioner and Principal Secretary to Government of Haryana Agriculture Department dated 3.7.2009 in response to letter dated 26.2.2009 of the assessee and extract of board meeting dated 18.3.2009. 5. The learned CIT (Appeals) got convinced with the submissions made by the assessee and deleted the addition made by the Assessing Officer on this account. The findings of the le....
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....has incurred in this case does not holds good. Further, the AO's another reason for disallowance that provision made is not allowable as per Income Tax Act and is allowed in the year of payment irrespective of the method of accounting followed by the assessee does not find any support from any provisions of the Income Tax Act nor the Act has barred in providing for provisions for the ascertainable liabilities. The sub section (2) of section 145 of the Act gives power to the Central Government to notify the accounting standards to be followed by the assessee following the mercantile system of accounting. In this regard, the notification number 9949 dated 25.01.1996 issued by CBDT provides for accounting standards relating to disclosure o....
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....sions made for payment of arrears, of salary on the basis of revision of pay scales w.e.f. 01.01.2006. 2. On the facts and in the circumstances of the case the Ld. CIT(A) has erred in holding that the liability to pay the arrears of salary accrued to the assessee during the financial year 2009-10, ignoring the facts that the liability was crystallized when a resolution was passed by the Board of Directors on 18.03.2009. 3. It is prayed that the order of the Ld. CIT (Appeal) be set-aside and that of the A.O, be restored. 4. The appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposed off." 7. The learned D.R. during the course of hearing before us submitted that this p....