1975 (8) TMI 52 - AT - Income Tax

Summary

The Appellate Tribunal ITAT Cochin allowed the deduction of Rs. 1,25,215 provision for gratuity under the Kerala Industrial Employees Payment of Gratuity Act, 1970. The Kerala High Court clarified that gratuity liability is incurred yearly, not just after 5 years of service. However, a discounted valuation is necessary. The matter is remitted back to the ITO for revised valuation. The Departmental appeal is partly allowed.