2018 (5) TMI 1899

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.... TVS Infotech Ltd., the assessee is in the business of software development and SAP implementation services. While making the assessments for the AYs 2008-09, 2010-11 & 2014-15, the AO found that the assessee claimed provision for leave salary as business expenditure relying on the decision of the Hon'ble Kolkata High Court in the case of M/s.Exide Industries Ltd. & Anr. Vs. Union of India & Ors. reported in (2008) 292 ITR 470. He disallowed such claim u/s.43B on the ground that the said expenditure is in the nature of contingent liability and the actual payment was not made during the respective Assessment Years. 3. Aggrieved, the assessee filed appeals for these Assessment Years, on this issue before the Ld.CIT(A). The Ld.CIT(A) confir....

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....Chennai in the case of Indian Overseas Bank, cited supra, is not applicable because in that case the Tribunal followed the Kolkata High Court decision in the case of Exide Industries Ltd, 292 ITR 470, whereas the Supreme Court stayed the order of the Calcutta High Court in Exide Industries Ltd., cited supra, vide petitions(s) for special leave to Appeal (Civil) No(s).22889/2008 dated 08.05.2009, which is reproduced as under: "Pending hearing and final disposal of the Civil Appeal, Department is restrained from recovering penalty and interest which has accrued till date. It is made clear that as far as the outstanding interest demand as of date is concerned, it would be open to the Department to recover that amount in case Civil App....

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....i Tribunal in the case of Indian Overseas Bank followed the decision of Calcutta High Court in the case of Exide Industries Ltd., which decision was stayed by the Hon'ble Supreme Court, the provisions of Section 43B(f) is in Statute and as held by the Kerala High Court in the case of South Indian Bank Ltd., cited supra, the sums have to be allowed only on actual payment basis and no provision which was not paid cannot be allowed, The decision of Bharat Earth Movers, 112 taxman 61, dated 09,08.2000 is also not applicable because the clause (f) of Section 43B was inserted subsequent to the said Supreme Court judgment. Therefore, disallowance of provision for leave encashment of Rs. 9,41,721/- is hereby confirmed." and submitted that since ....