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2013 (4) TMI 222 - AT - Income TaxLeave encashment benefit - A.O.treated the impugned liability as contingent liability and accordingly disallowed the claim of the assessee - Held that:- It is not in dispute that the assessee has made provision for leave encashment on the basis of the report of the actuarial valuation. Applying the settled principles of case of M/s. Bharat Earth Movers Ltd. [2000 (8) TMI 4 - SUPREME COURT] & Metal Box Company Of India Limited Versus Their Workmen [1968 (8) TMI 53 - SUPREME COURT] to the facts of the present case it is satisfied that the provision made by the appellant-company for meeting the liability incurred by it under the leave encashment scheme proportionate with the entitlement earned by employees of the company, inclusive of the officers and the staff, subject to the ceiling on accumulation as applicable on the relevant date, is entitled to deduction out of the gross receipts for the accounting year during which the provision is made for the liability. The liability is not a contingent liability - in favour of assessee.
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