The assessee is  a public sector undertaking. It claimed deduction of Rs.1.60 crores on account of the provision for revision of pay in its books of account. The deduction was made in the light of the Pay Revision Committee appointed by the Government of India. The AO disallowed the claim, holding that the expenditure was purely a provision against an unascertained liability and could not be claimed as expenditure for the AY 2007-08. The disallowance was upheld by the Tribunal. On appeal the Court held that ,provision for revision of pay by Government committee is  not contingent liability hence   provision is held to be  deductible.  Followed  CIT v. Bharat Heavy Electricals Ltd. [2013] 352 ITR 88 (Delhi) (HC) , CIT v. Excel Industries [2013] 358 ITR 295 (SC)

  As regards the fees the Court held that  no income accrued at the point of execution of agreement. The change in the accounting policy was a result of the audit objection raised by the Comptroller and Auditor General. The assessee had claimed deduction in profits in the computation of the total income, and added it as income in the subsequent AY, which had been accepted by the Assessing Officer. The change was, thus, revenue neutral. The addition of Rs. 1,28,00,000 was not justified. ( AY. 2007-08)