Provision made for liability in terms of proposed recommendation of 6th Pay Commission was to be allowed as deduction

Brief of the case In case of Gujarat Energy Transmission Corpn. Ltd vs. ACIT, assessee-company the company has provided certain sum towards employees cost for arrears payable upto 31st March, 2008 . It debited said sum in respect of 6 th Pay Commission arrears, since final decision on recommendations of 6 th Pay Commission was awaited. Assessee pleaded that it should be allowed in year of payment to him. Revenue made addition holding it as contingent liability. Tribunal in assesee’s own case in earlier assessment year relied upon CIT vs. Kerala State Financial Enterprises Ltd. wherein it was...