th Hansalaya, 9 Floor, New Delhi. New Delhi110001. AND ITA nos. 5523/Del/2011 & 3739/Del/2013 Asstt. Yrs: 200809 & 200910 Addl. CIT,Range14, Vs. PEC Ltd., New Delhi. Hansalaya, 9th Floor, New Delhi110001. ( Appellant ) (Respondent) Assessee by : Shri Sanjay Agrawal CA Department by : Ms. Kesang Y. Sherpa Sr. DR Date of hearing : 03/05/2016. Date of order : 10/05/2016. ORDER PER S.V. MEHROTRA, A.M: The assessee is in appeal assailing the order dated 20.9.2011 of the ld. CIT(A)XVII, New Delhi in appeal no. 119/CIT(A)XVII/Del/1011 relating to AY 200708. The department has preferred appeals against 2 CIT(A)'s orders in relation to AY 200809 and 200910. All these appeals were heard together and are being disposed of by a consolidated order for the sake of convenience. Assessee's appeal ITA no. 3910/Del/2010 (AY: 200708): 2. Brief facts of the case are that the assessee, a Government of India enterprise, in the relevant assessment year, was engaged in the business of export and import of stores, agricultural commodities, industrial raw material etc. The assessee company had filed its return declaring total income at Rs. 47,91,88,024/. The assessment was completed at a total income of Rs. 49,05,45,523/, inter alia, making additions on following counts: (i) Provision for productivity linked reward (PLR) Rs. 55,00,000/ (ii) Prior period expenses Rs. 49,53,168/ 3. The assessee preferred appeal before ld. CIT(A), who, while partly allowing the asessee's appeal, confirmed the aforementioned two disallowances. Being aggrieved, the assessee is in appeal before us and has taken following grounds of appeal: 1) That the order of the learned Commissioner of Income Tax (Appeals)XVII, New Delhi (hereinafter referred to as CIT (A)) dated 27062010 is bad in law and wrong on facts. 2) That on the facts and in the circumstances of the case, the learned CIT (A) has erred in not allowing the deduction of Rs. 3 55 lakhs on account of provision made for the liability relating to Productivity Linked Reward for the employees. 3) Without prejudice to the contention of the appellant in ground No.2 above, the learned CIT(A) has further erred in not giving directions to the Assessing Officer to allow the provision for Productivity Linked Reward in the year in which payment has been made i.e. assessment year 200809. 4) That on the facts and in the circumstances of the case, the learned CIT (A) has erred in confirming the disallowance of Rs. 49,53,168/ on account of legal expenses holding them to be prior period expenditure even though the judgment of the Court in respect of Rs. 38,79,013/ was delivered on 05052006 which related to the assessment year under appeal and the balance of Rs. 10,72,024/ crystallized during the year on acceptance of the judgment of the Court. 5) Without prejudice to the contention of the appellant in ground No.4 above, the learned CIT(A) has further erred in not giving directions to the Assessing Officer to allow the alleged prior period expenses in the year to which it relates according to him. 6) That the Appellant craves leave to reserve to itself the right to add, alter and/or vary any ground(s) at or before the time of hearing. 4. Ground nos. 1 & 6 are general and do not require any adjudication. 5. Ground nos. 2 & 3: Brief facts apropos these two grounds are that assessee had debited Rs. 55 lacs towards productivity linked reward scheme. The AO noticed that note 19 to the notes on account reads as under: 4 "Administrative Overheads In the line with Government directions, a productivity linked award scheme had been designed which has been approved by the Board and also by the Government. An amount of Rs. 55 lakh (previous year Rs. 55 lakh ) has been charged to the acco