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2018 (9) TMI 1411 - MADRAS HIGH COURTDeduction claimed on account of the provision for wages u/s 43B- Allowable as a deduction since it was quantified based on a consultant's advise - whether the claim for deduction made by the assessee was allowable as deduction or whether it was only an estimation and could be claimed only in the year when the expenditure is occurred. The above question was answered by the High Court of Delhi, while interpreting the very same? - Held that:- Useful reference can be made to the decision in the case of Bharat Heavy Electrical Limited [2012 (9) TMI 515 - DELHI HIGH COURT], wherein, the assessee claimed a provision for wage revision, which was disallowed by the Assessing Officer. When the same was put to challenge, it was held that the provision for wage revision was based on past experience, previous Pay Commission's Reports and other relevant factors and the deduction claimed for the period between the expiry of one Wage Board settlement or agreement cannot be termed as contingent because the wage and the probable revision or rates of revision would be within the fair estimation of the employer. Thus, deduction claimed on account of wage revision was held to be permissible. What is important is not the date of signing the agreement nor the later approval granted by the Government, but the effective date of commencement of the wage revision under the agreement and it was held that the liability for wage increase really accrued for the assessee would be the effective date. In the instant case, on the advise given by the Consultant, the assessee estimated the liability, which became payable with retrospective effect, i.e., from April 1998. - Decided in favour of assessee Levy of interest under section 234D of the Act, the assessee does not dispute the fact that the decision in the case of Infrastructure Development Finance Company Ltd.[2011 (9) TMI 591 - MADRAS HIGH COURT] has answered the question in favour of the Revenue and against the assessee.
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