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2017 (7) TMI 1191 - AT - Income TaxAddition made on account of disallowance of leave encashment - Held that:- No provision was made for leave encashment during that year in view of the constant strike and hartals which resulted in loss of production to the company and even if leave encashment would have been provided for in the year of its accrual, it would not have been allowed as deduction in view of the provisions of section 43B(f), because it is to be allowed in the year of its payment and non-provision of leave encashment in the year 2008- 09 has no relevance so far as provisions of Income Tax Act are concerned, because in terms of provisions of section 43B(f) even if provision would have been made in the accounts for leave encashment payable during the financial year 2008-09, the same would not have been allowed as deduction and the same is allowable only in the order of its payment which undoubtedly the year under appeal therefore, on the aforesaid observation, we do not have hesitation to hold that the Ld. CIT(A) correctly deleted the addition Addition made which does not console with the provisions of sub-section (1) of section 145 - Held that:- CIT(A) was justified in deleting the additions because the same console with the provision of sub-section 1 of section 145 of the I. T. Act. in view of the facts that the Assessee is regularly following the system of accounting for computation of its income. Disallowance of expenses under various heads from 15% to 8% - Held that:- Again it is not in controversy that the assessee is working in the remote area of Jammu Kashmir where every time external vouchers to obtain receipt of such payment is not practically possible and in exigencies the business, sometime the Assessee constrained to resort to such practice. According to our considered view although it was observed by the Ld. CIT(A) that the fact remains that expenditure are not fully verifiable but he finally concluded that the addition of disallowances at the rate of 15% is higher and finding proper and reasonable, the Ld. CIT(A) restricted it to 8%, we are in consonance with the observations of the Ld. CIT(A) and do not find any ground or material to interfere with it. Disallowance of expenditure on account of development of raid and quarry - revenue or capital expenditure - Held that:- In the instant case, it is not in controversy that the appellant has incurred expenses primarily on bajri, sand and labour engaged throughout the year and the road constructed cannot be pucca road as no such material has been purchased as would entail an enduring benefit and the said roads are used only for the purpose of carrying extracted limestone from mines to the factory site and other than this, this the same are of no use and the nature of business is such that access to quarry or mining place is of prime importance without which no excavation can be done and further because the appellant is working in the hills which do not have any pathways and in the compelling circumstances has to make temporary pathways to facilitate movement of men for extraction limestone to the factory site which is in the foothills of the mines and the extraction of limestone is germane to the business of the appellant company and even otherwise the road gets wiped out in rainy season and do no last long and every year replaced to be carried out. Even otherwise Hon'ble Apex Court in Laxmiji Sugar Mills Pvt. Ltd. Vs. CIT [1971 (8) TMI 13 - SUPREME COURT] held that apart from element of compulsion, road which were constructed and developed were not the property of the assessee. The land where these pathways are constructed is leased form Department of Geology and Mining therefore it could not be termed as property of the assessee on the aforesaid analyzation and observation, we do not find any material to disagree with the decision of the Ld. CIT(A) for the said ground. - Revenue appeal dismissed.
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