Assessee-bank made annual provisions for gratuity and leave encashment based on total number of employees, following AS-15, without treating those as expenses in books.\u00a0 Those provisions were debited to employee benefits (Schedule 16) but were not claimed as actual expenses; only actual payments made to employees were claimed.\u00a0 At year-end, assessee deducted those provisions from Schedule 16, resulting in net expenses in profit and loss account.Assessing Officer held\u00a0 that those amounts did not pertain to current year and should not be reduced from profit and loss account. CIT(A) affirmed the order of the AO.On appeal the Tribunal held that\u00a0\u00a0 amount which was being debited to assessee’s profit and loss account was after excluding provisions of gratuity and leave encashment and real expenses pertaining to assessment year under consideration were taken into account only.Therefore, findings of Assessing Officer that same amount did not pertain to year under consideration did not match with accounting treatment made by assessee-bank, and\u00a0 amount not to be reduced\u00a0 earlier year provisions from current profit and loss account. (AY. 2015-16)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 37(1) : Business expenditure-Provisions for gratuity and leave encashment-Accounting Standard-15-Claimed only actual payment made to employees-Not to be reduced earlier year provisions from current profit and loss account.[S. 145] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5,21],"tags":[],"class_list":["post-50528","post","type-post","status-publish","format-standard","hentry","category-gst-law","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-d8Y","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/50528","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=50528"}],"version-history":[{"count":3,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/50528\/revisions"}],"predecessor-version":[{"id":55479,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/50528\/revisions\/55479"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=50528"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=50528"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=50528"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}