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TMI Blog2012 (8) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment year 2000-01 on March 26, 2001, showing nil income. The order under section 143(3) of the Income-tax Act was passed on February 17, 2003. Later on, the Assessing Officer issued a notice under section 154 of the Act on November 24, 2003, as to why Rs. 15 lakhs claimed on account of provision made for leave salary should not be disallowed. The explanation was furnished. However, it was not accepted. Consequently, the Assessing Officer, vide its order dated March 6, 2007, disallowed the claim of Rs. 15 lakhs and added it back to the income of the assessee. Being aggrieved with the order of the Assessing Officer dated March 6, 2007, an appeal was preferred which was allowed by the Com- missioner of Income-tax (Appeals)-II, Jaipur, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The relevant portion of the judgment of the Appellate Tribunal is as under : "We have gone through the orders of the lower authorities as well as the decisions relied upon. We find that the assessment under section 143(3) was completed. Thereafter, the Assessing Officer found that the assessee had claimed Rs. 15 lakhs on account of provision for leave encashment, which could not be allowed while passing assessment order under section 143(3) of the Act. He, therefore, issued notice under section 154 but he was not satisfied with the explanation of the assessee that the provision of Rs. 15 lakhs was in respect of any ascertained liability. The Assessing Officer noted further that no details of calculation of the said amount was given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade for the liability. The liability was not a contingent liability. Since the issue is fully covered by the decision of the hon'ble Supreme Court, the learned Commissioner of Income-tax (Appeals) has rightly deleted the disallowance of Rs. 15 lakhs made by the Assessing Officer treating the provisions for leave encashment was not an ascertained liability. The first appellate order is thus upheld. The ground is thus rejected." The hon'ble apex court in Bharat Earth Movers' case [2000] 245 ITR 428 (SC) considered the question "Whether, on the facts and in the circum- stances of the case, the provision for meeting the liability for encashment of earned leave by the employee is an admissible deduction ?" The hon'ble apex court, after c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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