M/S. S R BATLIBOI & ASSOCIATES LLP,KOLKATA vs. DCIT, CIRCLE - 22, KOLKATA, KOLKATA

We have heard all these cases together since involving identical question of leave encashment provision disallowance(s) u/s 43B(f). Case files perused. These three appeals are therefore disposed of vide instant common order.

Both the Learned Representatives are ad idem at the outset that that hon'ble jurisdictional high court’s decision in Exide Industries Ltd. vs. Union of India (2007) 292 ITR 470 (Cal) had quashed this statutory provision itself to be ultra vires. Hon'ble apex court has stayed operation thereof vide order dated 08.05.2009. The Revenue’s civil appeal against the same is stated to be pending before the hon'ble apex court till date.

The assessee takes us first appeal ITA 2114/Kol/2017.It submits that the impugned disallowance in question of ₹262,438/- comprises of ₹1,96,407/- paid out of the provision made for leave encashment in earlier assessment years and in impugned assessment year whereas a similar amount of ₹6,3031/- has been reversed and credited to profit and loss account in the current impugned assessment year is out of provision of made leave encashment in earlier assessment year.

Coming to second and third appeals, learned counsel submits that the provisions in question are based on actuarial valuation and therefore the same ought to have been allowed by the lower authorities. Learned Departmental Representative strongly supports the impugned disallowance(es) made strictly