TMI Blog2017 (8) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Clause (c) to Explanation 1 to Section 115JB. - TAX APPEAL NO. 549 of 2017 - - - Dated:- 31-7-2017 - MR. AKIL KURESHI AND MR. BIREN VAISHNAV, JJ. For The Appellant : Mr Km Parikh, Advocate For The Opponent : Mr Manish J Shah, Advocate ORAL ORDER ( PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Tax appeal is admitted for consideration of following substantial question of law: Whether the Income Tax Appellate Tribunal was justified in remanding the proceedings before the Assessing Officer for fresh consideration of disallowance under Section 14A of the Act with a direction that if finally disallowance under Section 14A is to be made then the amount thereof in no case shall exceed the exempt income earned by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany for the purposes of the said section to prepare its profit and loss account in accordance with the provisions of paras 2 and 3 of Schedule 6 of the Companies Act. Explanation 1 to said section provides that for the purposes of the said section, book profit means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2), as increased by various items specified in Clauses (a) to (i) provided therein. Clause (c) thereof reads as thus: ( c) The amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; In other words, if an amount is specified for provision which is for meeting with the liabilities not ascertained such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Bharat Earth Movers Vs. Commissioner of Income Tax reported in 245 ITR 428 the Apex Court held that the amounts set apart by an assessee to meet its liability on account of leave encashment of employees is not a contingent liability. It was observed that what should be certain is the incurring of the liability which should also be estimated with reasonable certainty though the actual quantification may not be possible then. Its requirements are satisfied the liability is not a contingent one. The liability is in praesenti though it will be discharged at a future date. 19. Likewise in case of Metal Box Company of India Ltd. Vs. Their Workmen reported in 73 ITR 53, the Apex Court examined the question whether it is legitimate in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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