9911796707
TMI Blog2001 (4) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... ing question, set out at page 2 of the application, for our opinion: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the liability arising in the relevant previous year under the Payment of Gratuity Act has to be allowed as deduction irrespective of the fact whether the assessee maintained an approved gratuity fund or not?" In purs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3,11,036. In appeal, the Commissioner of Income-tax (Appeals), following the decision of the Supreme Court in the case of Shree Sajjan Mills Ltd. v. CIT [1985] 156 ITR 585, confirmed the disallowance. In appeal before the Tribunal, the Tribunal has allowed the claim of the assessee. The Tribunal has set aside the order of the Commissioner of Income-tax (Appeals), but observed that the liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. To remove this doubt, the Legislature has inserted the Explanation in sub-section (7) of section 40A of the Act, which reads as under: "For the removal of doubts, it is hereby declared that where any provision made by the assessee for the payment of gratuity to his employees on their retirement or on termination of their employment for any reason has been allowed as a deduction in computing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee of the previous year in which the sum is actually paid. In the result, we answer the question in the negative, i.e., in favour of the Revenue and against the assessee, i.e., the Tribunal was not justified in directing that the payment of gratuity be allowed as a deduction irrespective of the fact whether the assessee maintained an approved gratuity fund or not. The reference so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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