1994 (3) TMI 37

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.... J.---At the instance of the Revenue, the Tribunal has referred the following two questions under section 256(1) of the Income-tax Act, 1961, for the decision of this court : " (1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the provision for monetary value of the unavailed leave salary of the employees should be allowed as a dedu....

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....ed by way of business expenditure as it cannot be considered as statutory liability in terms of the provisions of section 25F, 25FF or 25FFF of the Industrial Disputes Act. The Income-tax Officer further held that the payment must be treated as voluntary, and, on that ground, disallowed the claim of the assessee. On appeal by the assessee, the Appellate Assistant Commissioner allowed that claim, a....

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....told that the assessee in that case was a sister concern of the assessee in the case on hand. Ratnam J., as the learned judge then was, speaking for the Bench, while answering a question identical to the present one, has observed as follows (at page 291) : ".....In other words, though under the provisions of the Industrial Disputes Act as such, no liability was cast on the assessee for making a....

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.... P. Ltd. v. CIT [1979] 118 ITR 261 (SC), where the Supreme Court stated that it is too late in the day now to treat the expenditure incurred by a management in paying reasonable sums by way of compensation for termination of service as not business expenditure. It is also significant that it is not the stand of the Revenue that the sum of Rs. 2,481 representing the payment of notice pay to the nin....