Pension Deduction Allowed

In a comprehensive ruling, the Tribunal decisively settled the long-standing controversy on pension provisioning by banks. It held that actuarial valuation transforms future employee benefit obligations into present accrued liabilities, thereby qualifying for deduction under Section 37(1). 

Rejecting Revenue’s arguments on specific provisions and statutory prohibitions, the Tribunal clarified that pension provisioning (distinct from fund contributions) operates in a separate legal field. It further emphasized that actuarial valuation is a scientifically accepted method and that absence of actual payment does not negate deductibility under the mercantile system. 

The ruling also strongly reinforces the doctrine of consistency, rejecting Revenue’s attempt to reopen settled issues without change in facts or law.