TMI Blog2011 (11) TMI 674X X X X Extracts X X X X X X X X Extracts X X X X ..... of wage revision. 3. In this case Assessing Officer noted that assessee in Schedule 18 Notes on accounts annexed with audited balance sheet and profit and loss account, the assessee company at point no. 9 has claimed provision made for wage revision, the relevant para read as under:- The pay revision of the employees of the company is due w.e.f. 1st January, 2007. Pending decision of the committee formed by the GOI, a provision of ₹ 1,13,58,312/- (previous year ₹ 2922055/-) has been made on estimate basis as apportioned by Holding Company i.e. NTPC Ltd. 3.1 Assessing Officer asked the assessee to justify the claim of the provision made in the books of accounts and to justify the allowability of the same during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, he made the addition of ₹ 1,13,58,312/-. 4. Upon assessee s appeal Ld. Commissioner of Income Tax (Appeals) held as under:- I have considered the facts of the case and the observations of the Assessing Officer in the assessment order. As far as Grounds nos. 3(i) (ii) are concerned, it has been submitted that wages of the employees of the appellant company were due for revision with effect from 1.1.2007 and that a Committee for revision of pay scales in central PSUs had been setup. The recommendations of the Committee were received subsequently but in the meantime, based on the demands of the employees, the Board of Directors of the appellant company sanctioned adhoc payment to the employees, with the condition that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 007- 08, relevant to Assessment Year 2008-09, although the recommendations of the Committee set up for the purpose were received later and the actual and final payment was released in October, 2009. Accordingly, the judgement of the Hon ble Apex Court in the case of Bharat Earth Movers vs. C.I.T. (supra) would be applicable to the case of the appellant and the provision made by the appellant for wage revision during the year under appeal is an allowable deduction. It has also been submitted that in case of NTPC Ltd. a similar issue was decided in favour of the assessee and that the Committee on Disputes declined permission to the CBDT to pursue the appeal before the ITAT because it did not find any infirmity in the decision of the Ld. Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied, the liability is not a contingent one. The liability is in presenti though it will be discharged at a future date. It does not make any difference if the future date on which the liability shall have to be discharged is not certain. 8. Applying the ratio from the aforesaid case law in the present case, we find that wage revision was due w.e.f. 1.1.2007 and the order under appeal is for year 2007-08 relevant to assessment year 2008- 09. The liability in this regard has certainly crystalized and cannot be considered contingent. In our considered opinion, this issue is squarely covered by the decision of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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