9911796707
TMI Blog1996 (9) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... that the sum of Rs. 2,18,100 representing provision made for gratuity payable to employees who had retired during the relevant previous year not hit by the provisions of section 43B of the Act, was not sustainable? " The facts for the purpose of answering the question may be narrated as follows : The assessee is a company incorporated under the Companies Act, owning tea estates and carrying on the business of tea plantation, manufacture of tea and sale thereof. For the benefit of the employees of the tea garden, the assessee-company made a provision of Rs. 2,18,100 in respect of gratuity payable to the employees who retired during the relevant previous year. The question relates to the assessment year 1984-85. The assessee claimed dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore this court and this court directed the Tribunal to refer the question. Hence, the present reference. We have heard Mr. R. Gogoi, learned counsel appearing on behalf of the assessee, and Mr. G. K. Joshi, learned senior standing counsel appearing on behalf of the Revenue. Mr. Gogoi submits that the finding arrived at by the Tribunal is erroneous. In the facts and circumstances of the case, the Tribunal ought to have held that the assessee was entitled to get deduction of the amount earmarked for gratuity of retiring employees. Mr. Gogoi also submits before us that the assessee-company did not have a fund but the assessee is entitled to get deduction on the basis of the provisions contained in section 40A(7). According to Mr. Gogoi, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no deduction under any circumstances can be allowed even if there are provisions under the Act. Section 43B has completely taken away the right of the parties in respect of any benefit given in any other provision under the Act. Mr. Joshi further submits that under no circumstances the assessee is entitled to get the benefit of allowance without creating any fund. Mr. Gogoi, on the other hand, submits that there are three modes of payment of gratuity, namely, (1) having an approved fund, (2) by having a fund though not approved, and (3) when there is no fund but provision is made for payment of gratuity. In the first two cases payment has to be made and in the third case it is not necessary to make payment but a provision has to be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " as given in Black's Law Dictionary, Fifth edition, and submits that " fund " does not only mean recognised fund, it means also an amount to capitalise with a view to the production of interest. Also, to put into the form of bonds, stocks, or other securities, bearing regular interest and to provide or appropriate a fund or permanent revenue for the payment thereof. Under section 43B, the Legislature has specifically mentioned about fund. Therefore, the meaning as given in section 43B cannot be said to be the same as given in section 40A(7)(b)(i). After considering all these aspects of the matter we are of the opinion that in case a provision is made for payment to the retiring employees in respect of the previous year, it is not necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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