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2017 (11) TMI 129 - HC - Income TaxDeduction claimed on account of ad-hoc provision for pay revision of employee - accrual of liability - year of assessment - taxation of real income or the book income - Whether the Tribunal was legally justified in reversing the findings of the CIT(A) and allowing the deduction claimed on account of ad-hoc provision for pay revision of employees? - test of necessity - Held that:- Conclusion of ld. CIT (A) that there was no crystallized liability and no agreement was arrived at between the parties, is without any merit. The appellant is a Gramin Bank sponsored by Punjab National Bank and having the trapping of scheduled bank. The appellant is also governed by the instructions issued by the RBI in this regard. In our opinion, the employees are entitled to the revision of the pay not when the report of the commission or committee is submitted to the management, but the employees are entitled to the revised pay from the date when it is found to be due and payable. The submission of report or acceptance of the report has no basis to say that it was not due and will only become due when the pay revision is accepted by the employees. In our view, the employees are entitled to revised pay from the date it was due and payable by the employer. See Commissioner or Income Tax V/s Bharat Heavy Electrical (2012 (9) TMI 515 - DELHI HIGH COURT) - Decided against revenue
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