ITAT upholds Disallowance of Leave Encashment Provision, Highlighting Actual Payment Requirement u/s 43B(f) of Income Tax Act

The Income Tax Appellate Tribunal (ITAT) upheld the disallowance of leave encashment provisions under section 43BF of the Income Tax Act. The tribunal emphasized that mere provisions for leave encashment are not sufficient to claim deductions; actual payments must be made. This ruling clarifies that companies must show proof of the actual payout of leave encashment to claim deductions. The decision is significant for businesses that offer leave encashment benefits.