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06 RINL 17 the provisions of S.40(A)(9) which provide for disallowance of contributions made to funds created for other purposes. Further, we do not find much weight in the contention that a provision made on the basis of actuarial valuation is also to be treated as contribution to a fund. Further, as rightly contended by the learned AR of the appellant this issue is squarely covered by the decision of Chandigarh Bench of the ITAT in the case of Glaxo Smithkline Consumer Healthcare Limited (supra) wherein the tribunal allowed the expenditure on accrual basis and their observations are as under:

62. Identical issue arose in Bokaro Power Supply Co. (P) Ltd. Vs DCIT (supra) of allowability of claim of deduction of post retirement medical benefits on the basis of actuarial valuation and the same was held to be not an unascertained liability and was held as allowable, observing as under:
5. We have heard both the sides on the issue. We have also perused the order of authorities below. The assessee company of was liable to pay for medical expenses of its retired employees in accordance with the terms of employment. Prior to this year, the assessee was claiming these expenses in the year of expenditure. Due to the change in the Accounting Standard in respect of the accounting of post retirement benefits, the assessee got done the actuarial valuation of these liabilities and started claiming the same on that basis. It is claimed in view of the Accounting Standard, AS-15. This claim was based on the valuation of liability on actuarial and scientific basis. In such cases, the actual and exact quantification may not be possible, however, liability cannot be said to be a contingent one. Since the provision has been made on scientific basis and the assessee is following mercantile system of accounting, therefore, in our considered view, the CIT (A) was justified in deleting the addition while deciding ITA No.149/Del/2012. A liability which has already accrued though discharged on a future date would be entitled for deduction. While working out the profit & gain of the business the accrued receipts are brought to the tax, similarly, accrued I.T.A. Nos.94, 95,96,97 & 141/Viz/2012 Assessment Years:2006-07 to2007-08 & 2005-06 RINL 18 liabilities due would also be entitled for deduction while working out the profit and gain of the business of the year. Computation of taxable profit for a particular year can be worked out only by deducting the actual payments made to the employees and present value of any payment in M/s. Rashtriya Ispath Nigam Limited, Visakhapatnam respect of the services in that particular year to be made in subsequent year. In view of this, we find the order of CIT (A) in ITA No.149/Del/2012 in order. We set aside the order of CIT (A) in ITA No.4921/Del/2010. For doing so, we also get support from the following decisions of Hon'ble Supreme Court and Hon'ble Delhi High Court. 5.1 Hon'ble Supreme Court in the case of Metal Box Company of India Ltd. vs. Their Workmen - 73 ITR 53 has held as under :-

M/s. Rashtriya Ispath Nigam Limited, Visakhapatnam APTRANSCO. As per the terms and conditions, RINL has to release payments to M/s. APTRANSCO on non-refundable basis. The amount payable by RINL under the agreement is towards service line charges and for development charges for extension of power supply for a CMD of 400 MVA.

The brief nature of work includes

a) Upgrading Kalapaka-VSS 220 KV DC Line with Twin Moose Conductor

b) Erection of 220 KV DC line from VSS to MRS with Moose Conductor

c) Erection of 315 MVA power Transformer, Bray extensions (HV&LV) and laying of 220 KV cable at PGCIL Sub Station.

As per clause No.5.3.2.2 the services lines created in the execution of the work shall be the property of M/s. APTRANSCO which in turn will maintain the same at its own cost irrespective of the fact that a portion or full cost of the service line has been paid by RINL/VSP. As the payment made by RINL to M/s. APTRANSCO does not create any right to RINL on the assets created in the execution of work, and the payment made is not refundable to RINL, the expenditure incurred by the company is accounted for in the books of accounts as revenue expenditure incurred wholly and exclusively for the for the business of the Company, hence requested the AO to allow the same as revenue expenditure.