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2013 (6) TMI 97 - HC - Income TaxLeave encashment - whether not an ascertained liability and thus liable to be added to the “book profit” under explanation 1 to Section 115 JB - MAT - Held that:- As decided in Bharat Earth Movers Versus Commissioner of Income-Tax [2000 (8) TMI 4 - SUPREME Court] 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. Thus provision for meeting the liability for encashment of earned leave by the employee is an admissible deduction.
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