TaxTMI 
TaxTMI 
2011 (10) TMI 701
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....s not justified in not accepting the claim of payment of arrears of salary on the basis of recommendation of 5th Pay Commission and notification of Govt. of India dated 4.3.1998. 2. That claim being a genuine liability and permissible deduction under the law and as such the claim is required to be allowed under the provisions of Act. 3. That claim is also in conformity with observation of Assessing Officer and CIT(A) for assessment year 1997-98 and as such admissibility of the claim is not in dispute. 4. That there is no evidence or finding that claim is of debatable nature or in respect of which two opinions are possible and as such claim is permissible deduction under the provisions of Sec. 154 of the Income Tax....
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.... is dated 4.3.1998. As mentioned by the Assessing Officer in the impugned order, the revised pay revision has to be made on the basis of Department of Public Enterprises OM dated 24.10.97, vide which Govt.'s decision of pay revision of public sector employees was communicated. Accordingly, the claim of the appellant is in the nature of a continent liability. The liability had not crystallized in the period relevant to the instant assessment year 1997-98, since the appellant had been maintaining the books of accounts on mercantile basis. Accordingly, the Assessing Officer's action of adding back the afore cited sum of Rs. 2.50 crores is hereby confirmed. As regards the appellant's contention that the claim may be allowed in respect of assess....
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....998. The claim of the assessee was rejected by the Assessing Officer merely on technical ground. The case laws referred by the Assessing Officer in fact supported the case of the appellant. Even otherwise, the Assessing Officer was under legal obligation to apply relevant provisions of law and determine the correct assessable income. Reliance was placed on the Apex Court's decision in the case of CIT v. Mahalaxmi Sugar Mills Co. Ltd. 160 ITR 920. 7. It was further contended that the claim was permissible deduction under the law and the same was in the nature of wage arrears as per notification of Govt. of India and factual and legal position to the above effect was not disputed even by the Assessing Officer. In the above facts, it was co....
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.... only in respect of the relevant assessment year and that also after due verification of facts. Thus, even the facts required verification. The assessee could have made the said claim by filing a revised return. However, this was not done. In any case, there was no mistake apparent from record as pointed out by the assessee. It was opined by the ld CIT(A) that the observation of the Assessing Officer that allowability of the provision would require examination of fact and therefore the same cannot be rectified u/s 154 of the Act was correct. Reliance was placed by him on the decision of the ITAT Chennai Bench in the case of ACIT V. Super Spg. Mills Ltd. in I.T.A. No. 768/MDS/2008. Further reliance as placed by him on the Hon'ble Punjab ....