9911796707
TMI Blog1999 (8) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... sets, liabilities etc., vested in the said Board under the Bihar Electricity Supply Undertakings (Acquisition) Act, 1979. The compensation money receivable by the assessee-company for such acquisition was not finalised on the date of making assessment. The assessee had claimed the gratuity payable as on July 17, 1975, at Rs. 13,35,467 excluding a sum of Rs. 1,17,418 which was allowed in the assessment for 1974-75. The Assessing Officer disallowed the claim of the assessee on the ground that there is a provision for payment of gratuity to the employees of the assessee on their retirement or on termination of their employment. The employees of the assessee neither retired nor their services are terminated nor the gratuity amount has been paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the vesting date." Clause 9 provides "deduction from the gross amount". Sub-clause (m) thereof further provides that "all wages or salary, bonus or any other payments of any employee in respect of the service rendered to the licensee and any compensation payable to any worker under any provisions of Chapter V-A of the Industrial Disputes Act, 1947, is deductible from the gross amount. Sub-clause (n) further provides that "all sums due to any employee in respect of provident fund, pension fund or gratuity fund or any other fund established for the welfare of the employees of the licensee is also deductible from the gross amount payable to the assessee as compensation." The funds which are deductible from the gross amount include the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount was paid for the discharge of the assessee's liability to pay gratuity to its employees for the period ending with the date of transfer. Hence, the payment should be taken to be a payment made to discharge the assessee's liability for gratuity, and, hence had to be allowed as a deduction. The decision of the Madras High Court has been approved by the Supreme Court in the case of W. T. Suren and Co. Ltd. v. CIT [1998] 230 ITR 643. At page 659, the apex court while considering the aforesaid decision of the Madras High Court observed as under : "One of the clauses of the agreement was that all the employees in that business would become employees of the transferee on terms no less favourable to them with continuity of service. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
