TMI Blog2015 (10) TMI 1706X X X X Extracts X X X X X X X X Extracts X X X X ..... ty and leave encashment - Held that:- In the present case, the assessee by way of scientific methodology had established that the impugned provisions were recognized by using a substantial scientific methodology and estimation which was also certified by an actuarial specialist. In this situation, the provision for gratuity and leave encashment made by the assessee are held to be fully explained or sustainable and the same is allowable as per ratio laid down by the Hon’ble Apex Court in the case of Rotork Controls (2009 (5) TMI 16 - SUPREME COURT OF INDIA). Accordingly, we are unable to see any infirmity or any other valid reason to interfere with the impugned order and we upheld the same. Accordingly, sole ground of the Revenue being devoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sstt. year 2008-09 passed in ITA No. 5187/Del/2013 vide order dated 30.9.2014 titled as ACIT vs. Sage Metals Pvt. Ltd. Delhi and the issue no. 2 relating to addition on account of provision of gratuity and leave encashment has been decided by the ITAT, Delhi Bench G , New Delhi in assessee s own case for the asstt. year 2008-09 passed in ITA No. 5808/Del/2013 vide order dated 20.5.2015 titled as DCIT vs. Sage Metals Ltd. Accordingly, he requested that following the aforesaid decisions in assessee s own case relevant for the assessment year 2008-09, the issues involved in the present appeal for the asstt. year 2009-10 may be allowed accordingly. 4. Ld. DR relied upon the order passed by the AO. 5. We have heard both the parties and pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny infirmity in the findings of the Ld. CIT(A) and therefore, the order of the Ld. CIT(A) is upheld. 6. In view of the above, the appeal filed by the Revenue is dismissed. 5.1 Respectfully following the above precedent of the Coordinate Bench in assessee s own case, the issue involved in ground no. 1 is decided against the Revenue and in favour of the assessee and this ground is dismissed as such. 6. The relevant paragraph no. 3 to 9 of the aforesaid ITAT order dated 20.5.2015 relating to issue no. 2 of disallowance on account of provision of gratuity and leave encashment read as under:- 3. We have heard the argument of both the sides and carefully perused the relevant material placed on record, interalia, assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied by passing impugned order u/s 154 of the Act and the same is sustainable. 6. On careful consideration of above sumissions from the order of the CIT(A) passed u/s 154 of the Act, we observe that the CIT(A) granted relief for the assessee with following observations: 2. It has been contended by the AR of the appellant that provision for gratuity (Rs. 49,01,000/-) and leave encashment (Rs. 11,36,000/-) had been fully explained during the course of appellate proceedings and it had been also recorded that the provision was computed on the basis of a certificate given by actuarial. This clearly established that the provision was based on a scientific mythodology and certified by a specialist. This aspect has also been mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y which can be measured only by using a substantial degree of estimation and the same is recognized when (a) an enterprise has a present obligation as a result of a past event; (b) it is probable that an outflow of resources will be rquired to settle the obligation, and (c) a reliable estimate can be made of the amount of the obligation and if these conditions are not met no provision can be recognized. Meaning thereby for legal recognition of a provision aforesaid conditions are to be fulfilled or required to be met by the assessee. 8. In the present case, the assessee by way of scientific methodology had established that the impugned provisions were recognized by using a substantial scientific methodology and estimation which was al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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