TMI Blog1987 (12) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... l accessories and leasing of gas cylinders. It also deals in purchase and sale of gas cylinders. For its employees there is an agreement at the time of employment which entitles the employees to what is described as a privilege leave with pay of 30 days per year. The employees are entitled to carry forward the unavailed leave to the next year and the leave can be accumulated up to a maximum period of 180 days. The employees can also surrender the leave but up to maximum period of 15 days during one financial year of 30 working days once during two financial years. The employees avail of this leave or encash it at the time of discontinuance of service, which may be caused by any of the following : (a) Resignation (b) Retrenchment (c) R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing terms in its books of account : Rs. Liability for accumulated leave up to 30-6-1981 not availed of to be 1,50,087.35 encashed up to 30-6-1982 : Less : Amount of leave encashed out of accumulated leave up to 30-6-1981 : 30,145.31 (Based on Salary as on 30-6-81) To provision reduced by the amount due of leave availed out of accumu-lated leave up to 30-8-1981 : 44,841.46 (-)74,986.77 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) made a detailed order for the asstt. year 1982-83 and followed the same reasoning in the asstt. year 1983-84 after noting down the salient provisions of the leave encashment scheme of the assessee and the submissions made before him along with the reasons given by the IAC (A). The ld. CIT (A) came to the conclusion, that in so far as this issue is concerned, the order of assessment for each year was rightly made by the IAC. He, therefore, dismissed the appeals on this issue. 8. We find from the assessment order for the year 1983-84 that the claim before the IAC (A) was that the assessee has changed the method of accounting, qua, the liability for leave encashment and, therefore, the liability which had been qualified on ascertainable an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith regard to certain items that go into the working of its total income, there is nothing wrong in the assessee's claim and the assessee is entitled to the change. It is, however, to be seen whether the change enable the assessee to determine the liability on fair and reasonable basis so as to make the qualified claim as admissible deduction as an expense u/s 37(1). We have on this issue applied our mind and perused the provisions of the leave rules. In fact, these have been examined by both the authorities below. In our considered opinion, the assessee has such rules which can and do enable the assessee to ascertain its contingent liability in a fair and reasonable manner. The claim of the assessee is, therefore, covered by the judgment o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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