Section 43B(f) "Leave Encashment" Law Is Unconstitutional: Kerala High Court

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From: editor@itatonline.org <itatonline.org@gmail.com>
Date: Thu, Jul 5, 2012 at 10:48 AM
Subject: Message from EGroup of SolapurCAs S. 43B(f) "Leave Encashment" Law Is Unconstitutional: Kerala High Court
To: editor@itatonline.org

 

Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

CIT vs. Hindustan Latex Ltd (Kerala High Court)

S. 43B(f) which allows deduction for leave encashment only on payment basis is ultra vires. In any event, it does not cover premium paid to insurer

 

The assessee claimed deduction u/s 37(1) for liability to pay, payment of, premium to LIC under the Group Leave Encashment Scheme policy. The AO allowed the claim though the CIT revised the assessment u/s 263 on the ground that u/s 43B(f), leave encashment was allowable as a deduction only on payment basis. The Tribunal reversed the CIT on the ground that s. 43B(f) had been held to be unconstitutional in Exide Industries 292 ITR 470 (Cal) and that the assessment order was not erroneous. On appeal by the department to the High Court, HELD dismissing the appeal:

(Click Here To Read More)

Regards,

Editor,

itatonline.org

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