2011 (9) TMI 750

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..... deduction on the provision made, Section 43B of the Act is with reference to the deduction on actual payment. As far as the present case is concerned, the assessee's case falls under Section 40A(7) of the Act. - Given the fact that Section 40A(7)(b) of the Act contemplates deduction in respect of the provision made, not only for the purpose of contribution towards the approved gratuity fund, but e .....

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..... ion 40A(7)(b) was applicable to the assessee's case?" 2. The assessee herein filed a return wherein it claimed deduction for a sum of Rs.32,62,863/- being the provision made in the accounts for the purpose of meeting out its gratuity liability in respect of those employees who had resigned or retired on Voluntary Retirement Scheme. It is stated that the assessee became a sick company, conseque .....

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..... t appeal by the Revenue. 4. Learned counsel for the Revenue submitted that when the assessee had not established as a fact, the payment of gratuity, which is allowable deduction under Section 43(b), the Tribunal committed serious error in allowing the claim of the assessee. Section 40 A(7) sub clause (a) and (b) reads as follows:- "40A(7)(a) Subject to the provisions of clause (b), no deductio .....

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..... t. As far as the present case is concerned, the assessee's case falls under Section 40A(7) of the Act. The Revenue's contention is that the assessee had not let in any evidence to show that the amount payable qualified for deduction under Section 40A(7) (b)(i) of the Act. 6. As already pointed out, a reading of the order of the authorities below shows that in view of its sickness, the assessee .....

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..... e during the year, rightly the Commissioner of Income Tax (Appeals) granted the relief. With the above said fact remaining undisturbed, the Tribunal considered the said contention for granting relief to the assessee. 7. Going by the provision under Section 40A(7)(b), considering the deduction both in the case of contribution of approved gratuity fund as well as to a case of provision for payme .....

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