2021 (9) TMI 439

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....e appellant pray that such claim may be directed to be allowed in view of specific provision u/s 36(1)(viia). 4. The interest charged u/s 234B, 234C and 234D is bad in law and bad on facts." 2. At the outset, the ld. AR submitted that the assessee does not wish to press Ground No. 3 of its appeal. Hence, the same is dismissed as not pressed. 3. Regarding Ground No. 1 and 2, the ld. AR submitted that the Registrar Co-operative Societies, Jaipur vide order no. 46(5)/SAVIRA/Bank-2/2009 part - 2 dated 10.02.2012 has directed the assessee to apply terms & conditions for staff/officers of the Central Cooperative bank Ltd., Bhilwara as per 14th pay agreement execution. Accordingly, it was agreed to pay arrears w.e.f. 01.01.2009 & the detail of such payments / provisions are as under:- Head of provision Total provision made for the year Amount paid Period of payment (a) Arrear of salary Rs. 1,50,00,000/- 1,99,91,560/- (Total Rs. 1,78,49,606 + Rs. 21,41,954/- for P.F. contribution of employer) 01.01.2009 to 31.03.2012 (b) Surrender leave Rs. 12,00,000/- Rs. 9,07,239/- 01.01.2009 to 31.03.2012 (c) Bonus & exgratia payments Rs. 8,50,....

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....re to be paid w.e.f. 01.01.2009. Since the liability though pertains to prior period but "Crystallized" & "Determined" during the year hence it is an ascertained liability for the year & has to be allowed in the year irrespective of year of payment. In the instant case, it was submitted that it is clear that the liability of such payments of arrears have arisen in F.Y. 2011-12 (A.Y. 2012-13) & all the facts were before the A.O. / Ld. CIT(A) to deduce the facts. 8. It was submitted that the Ld. CIT(A) has considered only such part which pertains to the year under consideration & has allowed a deduction of Rs. 67,13,839/- out of total addition of Rs. 1,70,50,000/- made by the AO. It was submitted that the addition so sustained by the ld CIT(A) amounting to Rs. 1,03,36,161/- may thus be set-aside and necessary relief be provided to the assessee. 9. Per contra, the ld. CIT/DR drawn our reference to the findings of the Assessing Officer and submitted that no doubt, the Registrar, Cooperative Society has directed the assessee to fulfill the wage compromise agreement. However, the agreement between the labour and the assessee management was only signed on 16.04.2012 and even no paym....

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.... leave of Rs. 9,29,576/- against the provision of Rs. 12.00 lacs. vi) proof of payment of Bonus and Exgratia Rs. 7,41,300/- against the provision of Rs. 8,50,000/-. In view of above addition made by the learned Deputy Commissioner of Income tax Circle Bhilwara deserves to be deleted. (ii) The assessee has further submitted as under:- "In continuation to our submission dated 14/06/2016 and as discussed we are please to submit employee wise working sheet of arrear of salary of Rs. 1,99,91,560/- out of this arrear amount pertain to period 01/04/2011 to 31/03/2012 of Rs. 67,13,839/- for which we are also enclosing herewith employee wise working sheet of arrear of salary. Therefore, we hereby pray that kindly allow above said amount in the year of assessment and give suitable direction to learned AO to allow remaining amount of arrear in the year of payment i.e. in the next year and oblige." 4.3 I have gone through the assessment order, statement of facts, grounds of appeal and written submission carefully. It is seen from the details filed by the appellant vide letter dated 22.06.2016 that out of the total arrear of salary of Rs. 1,99,91,560....

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.... a lawful claim against the assessee and in the event of default, the matter may be agitated before the appropriate legal forum. 14. In the instant case, if we look at the sequence of events, we find that there are directions issued by Registrar, co-operative societies on 10.02.2012 to implement 14th pay commission recommendations, thereafter, following such directions, the Board of Directors of the assessee co-operative bank passed a resolution on 11.04.2012 for implementing the 14th pay commission recommendations, thereafter, an agreement has been executed between the assessee co-operative bank and its employees and staff members on 16.04.2012 towards implementation of the 14th pay commission recommendations and finally, major payments towards arrears of salary have happened during November 2012. We therefore find that the liability of the assessee cooperative bank to implement 14th pay commission recommendation arose on adoption of resolution at its meeting of the Board of Directors read along with execution of agreement with its employees and staff members. Prior to these two significant events which happened during the financial year 2012-13, it cannot be said that the asse....