H.P. State Civil Supplies Corporation Ltd. Vs ACIT (Himachal Pradesh High court)
Himachal High Court held that as per section 43-B of the Income Tax Act deduction towards contribution to leave encashment fund is available only when the same is actually paid. Accordingly, appeal of the assessee dismissed.
Facts- The assessee filed its Income Tax Return (ITR) for the assessment year 2002-03, declaring income of Rs. 1,20,64,680/-. The ITR was filed on 31.10.2002. Assessee claimed an expenses of Rs. 88,01,203/- in the profit and loss account, which included a sum of Rs. 45,00,000/-paid by the assessee to Life Insurance Corporation of India (LIC) on account of contribution to Credit Leave Encashment Trust (CLET). The assessee, thus, claimed deduction of Rs. 45,00,000/-. AO passed an assessment order dated 29.3.2005. The claim of the assessee for deduction of an amount of Rs. 45,00,000/-was disallowed and resultantly an amount of Rs. 45,00,000/- was added to the income of the assessee.
CIT(A) and ITAT dismissed the appeal. Being aggrieved, the present petition is filed.
Conclusion- The proviso to Section 43-B of the Act deals with any sum which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-Section (1) of Section 139 of the Act, in respect of the previous year in which, the liability to pay such sum was incurred and instance of such payment is furnished by the assessee along with such return.
