UNION OF INDIA vs M/S EXIDE INDUSTRIES LTD.

The Supreme Court examined the constitutional validity of clause (f) of Section 43B of the Income Tax Act, which mandates that deductions for leave encashment can only be claimed upon actual payment. The court upheld the High Court's ruling that this clause is arbitrary and violates Article 14 of the Constitution, as it imposes an unreasonable condition on the eligibility for tax deductions. Consequently, the court ruled in favor of Exide Industries Limited, affirming the High Court's decision.