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2014 (9) TMI 1179
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....Income Tax (Appeals) erred in holding that reopening of assessment already completed under section 143(3) of the Act is valid. Counsel for the assessee submits that the Commissioner of Income Tax (Appeals) erred in holding that reopening of assessment already completed under section 143(3) of the Act is valid even when no tangible material was available with the Assessing Officer to reopen the assessment. Counsel submits that the details in respect of the issues on which reopening was done were already available with the Assessing Officer at the time of original assessment under section 143(3) of the Act, therefore reopening was based only on change of opinion and the assessment needs to be struck down as invalid on this ground. 4. Departmental Representative vehemently supports the order of lower authorities in reopening the assessment. 5. Heard both sides. Perused orders of lower authorities. The issue of reopening has been considered elaborately by the Commissioner of Income Tax (Appeals) and held that reopening in this case was made within a period of four years from the end of the assessment year and the reopening was made subsequent information available with the Assess....
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....g down reopening. (v) High Court of Mumbai in the case of Export Credit Guarantee Corporation of India Ud v. Addl. CIT (30 taxman. cam 211) (2013), it was held that there is no failure on the part of assessee to disclose material facts but there is complete failure on the part of the AO to apply his mind during original assessment to points on which assessment is reopened, reopening was treated as valid. 4.2.1 In view of the above judgments, I am of the considered opinion that there is no infirmity in reopening the assessment. The ground raised by the appellant, therefore, gets defeated. Now, let us move on to the merits of the case." 6. On going through the impugned order, we do not find any valid reason to interfere with the decision of the Commissioner of Income Tax (Appeals) in holding that reopening is valid. The grounds raised by the assessee on this issue are rejected. 7. Coming to the merits, the assessee has raised the following grounds of appeal:- "2. Without prejudice to the above contentions as to jurisdiction, it is submitted that even on merits, the CIT(A) erred in holding that the deduction u/s 36(1)(viia) should be restricted to the ....
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....g eventually allowed as deduction under Section 36(1)(viia) of the Act. In the books of the assessee, actual provision for bad and doubtful debts was only Rs. 4,01,44,027/-. Assessee had also made a provision of Rs. 2.23 Crores on its standard assets. If the provision for bad and doubtful debts alone was considered, then the total allowance under Section 36(1)(viia) was in excess of such provision. However, if the provision for standard assets was also considered as provision for bad and doubtful debts, then the total provision could go up to Rs. 6,24,44,027/-. Then of course, assessee's claim as finally allowed was well within the limits specified under Section 36(1)(viia) of the Act. At this juncture, a look at Section 36(1)(viia) is necessary and this is reproduced hereunder, for brevity:- "36(1)(viia) a scheduled bank [not being a bank incorporated by or under the laws of a country outside India] or a non-scheduled bank [or a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank], an amount [not exceeding seven and one-half per cent] of the total income (computed before making any deduction ....
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....as claimed by it in its return, there was no discussion as to how Section 36(1)(viia) was applied and whether the limits were corrected worked out. Admittedly, no question was asked to the assessee during the course of assessment proceedings also with regard to the claim made by it under Section 36(1)(viia), insofar as it concerns the quantum of such claim. This obviously show that there was no application of mind by the Assessing Officer at the time of assessment. Assessing Officer had not come to any conclusion at all having not considered the claim in the light of the conditions set out in Section 36(1)(viia) of the Act. We cannot say that he had taken a view which was in accordance with law. It is not a case where the Assessing Officer had adopted one of the courses possible in law. Of course, a cryptic order of the Assessing Officer by itself may not show that there was no thought given by him on a claim of the assessee. However, here there was no enquiry made during the course of assessment proceedings. Therefore, the order which was silent on the claim made by the assessee, and allowing such claim, without any discussion, will definitely render it erroneous and prejudicial t....
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.... Income Tax (Appeals) and they were not furnished before the Assessing Officer. 14. The counsel for the assessee submits that whatever materials produced before the Assessing Officer were filed before the Commissioner of Income Tax (Appeals) and no fresh details which were not filed before the Assessing Officer were placed before the Commissioner of Income Tax (Appeals). Counsel for the assessee placing reliance on the order of the Commissioner of Income Tax (Appeals) submits that Commissioner has rightly deleted the addition on verifying the details furnished by the assessee since the addition amounted to double taxation. Counsel places reliance on the order of the Commissioner of Income Tax (Appeals). 15. Heard both sides. Perused orders of lower authorities. Commissioner of Income Tax (Appeals) deleted this addition on verifying the details furnished by the assessee i.e. copy of computation of income, break-up of provisions of contingencies debited to profit and loss account etc. accepting the contention of the assessee that it has correctly added back the provision while computing its income. The Commissioner of Income Tax (Appeals) while accepting the submissions of the ....
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....he conclusion arrived at by the Commissioner of Income Tax (Appeals) in deleting the disallowance. The Revenue has also not placed any document on record to rebut the findings of the Commissioner of Income Tax (Appeals). In the circumstances, we uphold the order of the Commissioner of Income Tax (Appeals) and reject the grounds raised by the Revenue on this issue. 17. The next issue in the grounds of appeal of the Revenue is that Commissioner of Income Tax (Appeals) erred in holding that unreconciled entries in inter branch transactions credited to profit and loss account to the tune of Rs. 11,52,75,635/- is not taxable. 18. Departmental Representative referring to the assessment order submits that Assessing Officer made addition of Rs. 11.52 crores representing credit balances in the account arising due to non-reconciliation between the various branches of the assessee bank which is an error in accounting of inter-branch transactions. Departmental Representative submits that assessee could not reconcile these credit balances and they were rightly brought to tax by the Assessing Officer. The Departmental Representative placing reliance on the judgement of Hon'ble Supreme Cour....
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.... of the Act are not permissible. While arriving at such conclusion the Tribunal considered the judgement of Hon'ble Supreme Court in the case of T.V.Sundaram Iyengar & Sons Ltd. (supra) and held as under:- "33. The facts of the case of the assessee are exactly similar to the facts before the Hon'ble Calcutta High Court in the case of Betts Hartley Huett and Co. Ltd. (supra). In that case, it was held that the transaction between the head office of the assessee and its branch in India was a transaction between the principal and principal. In law, there cannot be a valid transaction of sale between the branch and its head office. As it is ultimately based on a proposition that no person can enter into contract with one self. Debiting or crediting one's account cannot alter the legal position. Applying the same principle as enunciated by the Hon'ble Calcutta High Court, it cannot be said that the transactions between the branches gave rise to an income assessable under the Income-tax Act. The substance of the entire transaction, in our view, appears to be pure accounting lapses on the part of the bank or its branches to properly reconcile the transactions. In fact....
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....ribution of dividends and it was specifically made clear by the Reserve Bank of India that the obligation to discharge the liabilities arising thereunder is upon the bank. Meaning thereby, there is no question of the amounts being treated as income in the hands of the bank. We must appreciate that these transactions in the inter branch accounts are mere accounting entries. When the transactions were made to these accounts initially, these were not in the nature of income either of the branches involved or of the bank as a whole. It is a part of transactions on the real accounts and not on what is known as revenue accounts. Therefore, it is difficult to say that the amounts in question bear the same character as unclaimed deposit received from the customers by the assessee T.V.Sundaram Iyengar & Sons Ltd. 34. In the light of the discussions of these facts, it is difficult to say that either the decision of the Apex Court in the case of T.V.Sundaram Iyengar & Sons Ltd. (supra) or other decisions including the decision of Hon'ble Delhi High Court in the case of CIT Vs. Rajasthan Golden Transport Co.(P} Ltd. - 249 ITR 723 are applicable to the facts of the case. In fact, t....
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....ction 115JB of the Act and also income under normal provisions of the Act as the income under normal provisions of the Act is more he adopted the said income. The assessee also challenged against the action of the Assessing Officer in computing book profits under section 115JB contending that provisions have no application to its bank. Having gone through the decision of the co-ordinate Bench in assessee's own case in ITA No.1757/Mds/2011 dated 2.4.2013, we find that the issue has been decided in favour of the assesse. Respectfully following the said decision, we uphold the order of the Commissioner of Income Tax (Appeals) and reject the grounds raised by the Revenue on this issue. 26. The last issue in the grounds of appeal of the Revenue is that Commissioner of Income Tax (Appeals) erred in holding that interest under section 244A is to be granted on the interest component of the refund also. 27. Departmental Representative placing reliance on the decision of the Hon'ble Supreme Court in the case of CIT Vs. Gujarat Fluoro Chemicals (358 ITR 291) submits that assessee is not entitled for interest on interest. 28. Counsel for the assessee submits that co-ordinate Bench in ....
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....ased on country risk as per RBI guidelines. 32. Ground no.1 is raised challenging the order of the Commissioner of Income Tax (Appeals) in upholding the reopening of assessment. Counsel for the assessee submits that the Commissioner of Income Tax (Appeals) erred in holding that reopening of assessment already completed under section 143(3) of the Act is valid even when no tangible material was available with the Assessing Officer to reopen the assessment. Counsel submits that the details in respect of the issues on which reopening was done were already available with the Assessing Officer at the time of original assessment under section 143(3) of the Act, therefore reopening was based only on change of opinion and the assessment needs to be struck down as invalid on this ground. 33. Departmental Representative vehemently supports the order of lower authorities in reopening the assessment. 34. Heard both sides. Perused orders of lower authorities. The issue of reopening has been considered elaborately by the Commissioner of Income Tax (Appeals) and held that reopening in this case was made within a period of four years from the end of the assessment year and the reopening w....
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....ed but did not uncover, is not a good reason for striking down reopening. (v) High Court of Mumbai in the case of Export Credit Guarantee Corporation of India Ud v. Addl. CIT (30 taxman. cam 211) (2013), it was held that there is no failure on the part of assessee to disclose material facts but there is complete failure on the part of the AO to apply his mind during original assessment to points on which assessment is reopened, reopening was treated as valid. 4.2.1 In view of the above judgments, I am of the considered opinion that there is no infirmity in reopening the assessment. The ground raised by the appellant, therefore, gets defeated. Now, let us move on to the merits of the case." 35. On going through the impugned order, we do not find any valid reason to interfere with the decision of the Commissioner of Income Tax (Appeals) in holding that reopening is valid. The grounds raised by the assessee on this issue are rejected. 36. Coming to the merits, ground no.2 is raised challenging the order of the Commissioner of Income Tax (Appeals) in upholding the computation of deduction under section 36(1)(viia) of the Act made by the Assessing Officer by cons....
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....unds observing as under:- "4. The third ground of appeal of the assessee is regarding restriction of claim in respect of deduction under section 36(1)(viia) to the extent of provision made in the books. The A.R. for the assessee has conceded that this issue has already been decided against the assessee bank in the case of Bharat overseas Bank Ltd. in ITA No.1191/Mds/2012. This issue had also come up before the Tribunal in ITA No.818/Mds/2010 relevant to the assessment year 2007-08. The findings of the Tribunal are reproduced herein below:- "7. We have perused the orders and heard the rival submissions. The original claim, which was allowed by the Assessing Officer under Section 36(1)(viia) of the Act, was as follows:- 7.5% of Gross Total Income: Rs. 5,74,07,362 10% of Rural Advances (Rs. 27,26,50,990/-): Rs. 2,72,65,099 Rs. 8,46,72,461 Thereafter, assessee had moved in appeal against some of the additions made by the Assessing Officer on other issues and pursuant to the relief granted in such appeal, the gross total income which earlier stood at Rs. 76,54,31,493/- came down to Rs. 35,38,65,546/-. As a result of the reduction in gr....
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....nk itself has treated such assets as good and recoverable, any provision made on such assets cannot be considered as a provision for bad and doubtful debts. The debt itself being good, a provision made on good debt cannot be considered as a provision for bad and doubtful debts. May be, the RBI has made a regulation for 10% provision for standard assets also a prudential norm. This can however be considered as a measure prescribed in abundant caution, to deal with a situation where banks are not to suffer shock of sudden delinquency that could happen in future. There is always a possibility that an asset, which is fully recoverable, may not be so at future date. Nevertheless, possibility of happening of such a contingency cannot be a sufficient reason to consider a provision made on standard assets also as a provision for bad and doubtful debts. Therefore, claim of the assessee that provision for standard assets also has to be considered for applying the condition set out under Section 36(1)(viia) is not in accordance with law. If the provision for standard assets is not considered as provision for bad and doubtful debts, the actual provision for bad and doubtful debts made by the a....
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....TU, Chennai dated 20.9.2013 for the assessment year 2007-08. 43. The first issue in the appeal of the Revenue is that Commissioner of Income Tax (Appeals) erred in holding that deduction under section 36(1)(viia) is to be allowed from total income including the income of the merged entity Bharat Overseas Bank Ltd. Brief facts are that during this assessment year Bharat Overseas Bank Ltd. was merged with the assessee's bank Indian Overseas Bank. The assessee claimed deduction under section 36(1)(viia) on the total income of the bank including income of the merged entity Bharat Overseas Bank Ltd. also. The Assessing Officer while completing the assessment restricted the deduction only on the income of the assessee bank on the ground that income of Bharat Overseas Bank Ltd. already enjoyed all the benefits of deduction under section 36(1)(viia) of the Act. On appeal, the Commissioner of Income Tax (Appeals) allowed the claim of the assessee. 44. Departmental Representative vehemently supports the order of the assessment in not allowing deduction under section 36(1)(viia) on the income of Bharat Overseas Bank Ltd. 45. Counsel for the assessee relied on the order of the Commiss....
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....he assessment year 2009- 10 in ITA No.1949/Mds/2012 dated 18.6.2014. A copy of the order is placed on record. 50. Departmental Representative supported the order of the Assessing Officer. 51. We have perused the orders of lower authorities and the decision of this Tribunal relied on. We find that this issue has been decided in favour of the assessee by this Tribunal in assessee's own case for the assessment year 2009-10 in ITA No.1949/Mds/2012 dated 18.6.2014. The Tribunal while rejecting the appeal of the Revenue held as under:- "56. Now we come to the additional ground which raises issue of computation of average of advances for allowing deduction u/s 36(1)(viia). The relevant pleadings read as follows: "The CIT(A) erred in directing the AO to consider the aggregate average advances outstanding at the end of each month and not the incremental advances granted during each month, in computing the deduction u/s 36(1) (viia). The CIT(A) ought to have appreciated that as per clause (a) of Rule 6ABA, the sum to be reckoned for deduction u/s 36(1 )(viia) has to be computed on advances made by the rural branch during the previous month & the same should be outstan....
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.... decision, the AO is directed to consider the aggregate average advances outstanding at the end of each month and not the incremental advances granted during each month in computing the deduction u/s 36(1 )(viia)." 59. Before us, the Revenue reiterates the pleadings to challenge the CIT(A)'s order. However, on being asked to point out specific distinguishing features vis-à-vis the aforesaid precedent, it has failed to draw any. In these circumstances, we uphold the relevant findings of the CIT(A) and reject the Revenue's additional ground." 52. Respectfully following the above order of this Tribunal, we reject the grounds raised by the Revenue for the assessment year 2007-08 also. 53. The last issue in the appeal of the Revenue is that the Commissioner of Income Tax (Appeals) erred in holding that the interest under section 244A is to be granted on the interest component of the refund also. 54. This issue has been decided in favour of the Revenue in para no.29 of this order in ITA No.1951/Mds/2013. For the reasons and conclusions arrived therein, the grounds raised by this Revenue on this issue for the assessment year 2007- 08 are allowed. ITA No.2126/Md....
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....considering provision made in books of accounts for debts having arrears, if any, upto 90 days classified under RBI norms as Standard Assets. 1.2 In computing the deduction u/s. 36(1)(viia) the CIT(A) had also erred in confirming the order of the A.O. in not considering provision for debts based on country risk as per RBI guidelines." 59. Counsel for the assessee submits that these grounds have been decided against the assessee by the co-ordinate Bench of this Tribunal in assessee's own case for the assessment year 2008-09 in ITA No.1815/Mds/2011 dated 2.4.2013. 60. We have perused the above order of the co-ordinate Bench of this Tribunal in ITA No.1815/Mds/2011 dated 2.4.2013 and find that the Tribunal has decided both these issues against the assessee by dismissing the grounds observing as under:- "4. The third ground of appeal of the assessee is regarding restriction of claim in respect of deduction under section 36(1)(viia) to the extent of provision made in the books. The A.R. for the assessee has conceded that this issue has already been decided against the assessee bank in the case of Bharat overseas Bank Ltd. in ITA No.1191/Mds/2012. This issue had a....
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....mputed in the prescribed manner." It is clear from the above that it is not a standard allowance which is given, but, the allowance is subject to the actual provision made by the assessee, which in no case shall exceed 7.5% of the gross total income. Therefore, the argument of the assessee that whatever the provision it had actually made in its books, a provision of 7.5% of the gross total income had to be allowed, is not in accordance with law. Now considering the second aspect, whether provision for standard assets could be considered as provision for bad and doubtful debts, admittedly a provision on standard assets is not against any debts which had become doubtful. Standard assets are always considered recoverable, in the sense, bank has no doubt of recoverability. When the bank itself has treated such assets as good and recoverable, any provision made on such assets cannot be considered as a provision for bad and doubtful debts. The debt itself being good, a provision made on good debt cannot be considered as a provision for bad and doubtful debts. May be, the RBI has made a regulation for 10% provision for standard assets also a prudential norm. This can however be c....
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....f the Revenue" is a term of wide import and not confined to loss of tax. An order without application of mind is definitely prejudicial to the interests of the revenue. We are in agreement with ld. CIT that the order of Assessing Officer was erroneous insofar as it was prejudicial to the interests of Revenue. No interference is required. 8. In the result, appeal filed by the assessee is dismissed." In view of the aforesaid findings, this ground of appeal of the assessee is dismissed." 61. Respectfully following the said decision, we reject the grounds raised by the assessee. 62. The next issue in the appeal of the assessee that Commissioner of Income Tax (Appeals) failed to appreciate that since all the investments held by the appellant constitutes its stock-in-trade the provisions of section 14A are not applicable and hence no disallowance is called for. 63. Counsel for the assessee submits that assessee bank is holding securities as stock-in-trade, when once securities are held as stock-in-trade, no disallowance under section 14A is warranted. The counsel submits that co-ordinate Bench of this Tribunal decided similar issue for the assessment year 2009-....
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....d that of hon'ble Calcutta high court in Dhanuka & Sons vs CIT, 339 ITR 319. Not only this, the hon'ble Third Member also refers to the case law CCI Ltd.(supra) and expresses a view that the aforesaid decisions of other hon'ble high courts were not brought to the notice of the Karnataka high court. In these circumstances, the picture that emerges is that various high courts have expressed divergent opinions on this legal issue. That being the case, we apply the decision of CIT vs Vegetable Products Ltd 88 ITR 192 and in the view favourable to the assessee is followed. So, in principle, we hold that the authorities below have wrongly invoked section 14A in case of investments held as 'stock-intrade' wherein the 'exempt' income by way of dividends is only incidental. It is also made clear that since there is no verification of the factual position of investments held as 'stock-in-trade', we accept the assessee's contentions in principle only and remit the issue back to the Assessing Officer to determine the true factual position. The assessee's alternative plea carries only an academic significance. The relevant ground is accepted for statistical purposes." 66. Since t....
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....e respective parties. The co-ordinate Bench of the Tribunal in ITA No.1690/Mds/2006 has decided the issue against the assessee by holding that liability has not been crystallized and it can be allowed consequent upon its crystallization within the framework of law. Be that as it may, it is an admitted fact that agreement was entered between the Indian Banks Association including the assessee and the Unions of staff/workers for revision of wages etc. It is also an admitted position that consequent to revision in wages the amount has been paid to the staff. A perusal of the order of CIT(A) shows that though in Notes on Account it is stated that the provision of Rs. 25.00 crores was made in an ad-hoc manner during the accounting period, it formed part of the liability incurred by the bank actually in the next accounting year and the bank has not claimed the amount for that year. The expenditure is an business expenditure allowable under section 37 of the Act. Now, the question is when such expenditure should be allowed: Whether it should be allowed in the assessment year relevant to the financial year in which Memorandum of Understanding was signed or in the year of actual pa....
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....ter, he distinguished case law PVAL Kulandagan Chettiar vs CIT , 267 ITR 654 by observing that contrary to the facts of this case, Shri Chettiar was fiscally domiciled in Malaysia and did not have any permanent establishment in India. On DTAA with south Korea, the Assessing Officer was of the view that the terms contained therein did not give exclusive rate of tax to the concerned country and it had only provided for credit method of relief in double taxation. Accordingly, he declined to accept the assessee's claim. 23. Coming to the DTAAs between India and Singapore, Thailand and Srilanka, the Assessing Officer observed that they also recognized 'credit' method. He alleged the assessee not to have provided any difference in rates of tax in the above stated tax jurisdictions. Simultaneously, the Assessing Officer held that on furnishing details on assessee's part, the claim would be allowed in its favour. This resulted in disallowance/addition of Rs. 55,65,44,48/-. 24. In lower appellate order, the CIT(A) has quoted a notification No.S.O 2123(E) dated 28.8.2008 reported as 304 ITR(St.)63, clarifying that in such a case involving a DTAA, an income has to be include....
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....ce on the said order. Departmental Representative supports the order of Assessing Officer. 84. On going through the order of the co-ordinate Bench in ITA No.1949/Mds/2012 dated 18.6.2014 we find that the issue in appeal has been decided in favour of the assessee holding as under:- "43. The Revenue's fifth substantive ground challenges the CIT(A)'s order deleting disallowance of Rs. 69,13,38,139/- qua loss on revaluation of investments. 44. In 'scrutiny' the Assessing Officer found the assessee to have claimed deduction by way of loss on revaluation of investments of Rs. 69,13,38,139/-. Per Assessing Officer, the same was neither an allowable expenditure nor an ascertained liability. In assessment order, he placed reliance on his findings for assessment years 1996-97 and 1998-99 for making the impugned disallowance. 45. In lower appellate order, the CIT(A) has quoted his predecessor's orders for assessment years 2005-06 and 2008- 09(supra) as well as various decisions stated herein below: UCO Bank vs CIT 240 ITR 355 (SC) CIT vs City Union Bank Ltd 291 ITR 144 (Mad) Bharat Overseas Bank Ltd vs ACIT I.T.A.No. 239/Mds/2001 dated 7.1.2005 ....
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.... of trading derivatives could not have been disallowed. So, the impugned disallowance stands deleted. 50. Coming to this ground, we find from the parties' written submissions and paper books filed that the 'tribunal' has upheld the CIT(A)'s identical findings in assessment year 2008-09. On being granted opportunity, the Revenue has failed to point out any distinction on facts. Therefore, we uphold the CIT(A)'s order deleting the aforesaid disallowance and reject the Revenue's ground." 88. Respectfully following the said order, we uphold the orders of Commissioner of Income Tax (Appeals) on this issue and reject the grounds of Revenue. 89. The next issue in the appeal of the Revenue is that the Commissioner of Income Tax (Appeals) erred in allowing depreciation on UPS @ 60%. The Departmental Representative places reliance on the order of the Assessing Officer. Counsel for the assessee submits that this issue has been decided in favour of the assessee for the assessment year 2009-10 in ITA No.1949/Mds/2012 dated 18.6.2014 at page 10 & 11 in para 16 to 18 of the order in restricting depreciation to 15% as against 80% claimed by the assessee. 90. On perusal of....
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....nal has held as under:- "We have heard the submissions made by both the parties and have perused the orders of the authorities below and the judgements referred to by both the sides. The relevant extract of the provisions of section 43B(f) are reproduced herein below:- "43B. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of- a) xxxxxxxxxx b) xxxxxxxxxx c) xxxxxxxxxx d) xxxxxxxxx e) xxxxxxxxx (f) any sum payable by the assessee as an employer in lieu of any leave at the credit of his employee, shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him: Provided that nothing contained in this section shall apply in relation to any sum which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-section (1) of se....
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....extracted and reproduced as under: (i) For an assessee maintaining his accounts on the mercantile system, a liability already accrued, though to be discharged at a future date, would be a proper deduction while working out the profits and gains of his business, regard being had to the accepted principles of commercial practice and accountancy. It is not as if such deduction is permissible only in the case of amounts actually expended or paid ; (ii) Just as receipts, though not actual receipts but accrued due are brought in for income-tax assessment, so also liabilities accrued due would be taken into account while working out the profits and gains of the business; (iii) A condition subsequent, the fulfilment of which may result in the reduction or even extinction of the liability, would not have the effect of converting that liability into a contingent liability ; (iv) A trader computing his taxable profits for a particular year may properly deduct not only the payments actually made to his employees but also the present value of any payments in respect of their services in that year to be made in a subsequent year if it can be satisfactorily est....