2002 (9) TMI 257

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....oD clearance for the same and since the assessee is, therefore, not pressing the same, these two grounds may be treated as withdrawn. Accordingly, we dismiss the ground Nos. 1 and 2 as withdrawn. 3. Solitary grievance of the assessee, for which CoD clearance is obtained and which the assessee has pressed before us, is against CIT(A)'s confirming the disallowance of Rs. 1,03,07,000 made by the AO on account of provision to give effect of revision of pay scale of officers based on Bureau of Public Enterprises (BPE) guidelines. This grievance is covered by ground of appeal No. 3. 4. Briefly, the material facts giving rise to this dispute before us. During the course of assessment proceedings, AO noticed that the assessee-company had, cla....

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.... perused, and applicable legal position duly deliberated upon. 6. We find that it is not in dispute that the pay scales and other benefits of the officers were due for revision w.e.f. 1st Aug., 1987, and the exercise of revising the same was already in progress. We have also noted, that the basis of revision was ultimately accepted by the Government and a formal approval to the same was granted. In DO No. 2(50/86-BPE(WC), dt. 4th April, 1990, a copy of which was placed before us, Bureau of Public Enterprises had advised that the Government had decided that pay scales of non-unionized supervisors and executives were to be revised w.e.f. 1st April, 1987, as per details given in annexure. I to that letter. It was on this basis that the asse....

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....t in the case of Bharat Earth Movers Ltd. vs. CIT (2000) 162 CTR (SC) 325 : (2000) 245 ITR 428 (SC). The law is settled; if a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should also be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied the liability is not a contingent one. The liability is in praesenti though it will be discharged at a future date. It does not make any difference if the future date on which the liability shall have to be discharged is not c....