HP COMPUTING AND PRINTING SYSTEMS INDIA PRIVATE LIMITED ,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(1)(1), BANGALORE

ITA 2000/BANG/2025Status: DisposedITAT Bangalore21 August 2026AY 2016-1713 pages
AI SummaryAllowed

What were the facts?

The assessee company made a provision for sick leave amounting to Rs. 1,86,84,414 based on actuarial valuation. The Assessing Officer disallowed this provision, stating it was not an ascertained liability as the sick leave was non-encashable and only carried forward.

What did the Tribunal hold?

The Tribunal held that the provision for sick leave, even if non-encashable, represents an ascertained liability based on actuarial valuation. The assessee has an obligation to grant paid absence when such leave is utilized, and this obligation is deductible under Section 37(1).

What were the issues?

Whether a provision for non-encashable sick leave, based on actuarial valuation, is allowable as a deduction under Section 37(1) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 37(1),Section 43B(f)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: WASEEM AHMED & KESHAV DUBEY

PER WASEEM AHMED, ACCOUNTANT MEMBER:

This appeal is filed by the Assessee against the order of Ld. NFAC vide DIN: ITBA/NFAC/S/250/2025-26/1078243136(1) dated 07-Jul-2025 for the Assessment Year 2016-17. ITA 2000/BANG/2025 HP COMPUTING AND PRINTING SYSTEMS INDIA PRIVATE LIMITED

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The order continues below.

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