SC upheld constitutional validity of Section 43B(f) of Income Tax Act, 1961

Union of India & Ors. Vs. Exide Industries Limited & Anr. (Supreme Court) Before the judgment in Bharat Earth Movers (supra), various tribunals and High Courts across the country were treating the liability in lieu of leave encashment as a contingent liability. This did not go down well with the assessees following the mercantile accounting system, as they were not able to avail deductions upon mere creation of a provision against such liability without making the actual payment. A challenge to this legal position reached before this Court in Bharat Earth Movers (supra), wherein the Co...