Employees Benefits provisions allowable in book profit computation

Mercury Car Rentals Pvt. Ltd. Vs DCIT (ITAT Kolkata)

It is noted that the provisions in respect of gratuity, leave encashment, ex-gratia & bonus were created on actuarial basis and had been estimated with reasonable certainty. Accordingly such provisions cannot be said to be provisions of unascertained liabilities so to add it back under clause (c) of the Explanation to section 115JB(2). Since these provisions are in the nature of ascertained liabilities, I am of the considered view that the same is allowable while computing book profit u/s 11 5JB o

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