TMI Blog2006 (7) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... these petitions are dismissed. - Adarsh Kumar Goel And Rajesh Bindal, JJ. For the Petitioner : S. K. Garg Narwana For the Respondent : Sanjay Bansal ORDER 1. This order will dispose of I.T.C. Nos. 199 and 200 of 1994 as the similar question of law is involved in both the cases. The facts have been taken from I.T.C. No. 200 of 1994. 2. This is a petition under section 256(2) of the Income-tax Act, 1961 (for short, the Act ) seeking direction to the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for short the Tribunal ) for referring the following question of law to this court for opinion : "Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in deleting the additions of Rs. 1,29, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of opinion amongst the members constituting the Bench was referred to third member and ultimately, the same was rejected by majority opinion of the members. 4. The main contention of the counsel for the revenue is that at the stage of consideration of petition for reference of a question of law to this court, there was difference of opinion amongst the members of the Tribunal and the matter was required to be referred to third member. This itself shows that the question of law arises in the case and the same should be directed to be referred to this court for opinion. Further, it was submitted that the claim of the type in hand is nothing else but a contingent liability which is not a permissible deduction. 5. On the other hand, contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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. The High Court was not right in taking the view to the contrary. The appeal is allowed. The judgment under appeal is set aside. The question referred by the Tribunal to the High Court is answered in the affirmative, i.e., in favour of the assessee and against the revenue." 7. Reference to a judgment of Privy Council in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e judgments, Delhi High Court in Vinitec Corpn. (P.) Ltd. s case (supra) has held as under: "The ratio decidendi of the above cases is squarely applicable to the facts of the present case. It is not disputed that the warranty clause is part of the sale document and imposes a liability upon the assessee to discharge its obligations under that clause for the period of warranty. It is a liability which is capable of being construed in definite terms which has arisen in the accounting year. May be its actual quantification and discharge is deferred to a future date. Once an assessee is maintaining his accounts on the mercantile system, a liability accrued, though to be discharged at a future date, would be a proper deduction while working out t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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