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TMI Blog1985 (2) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... of law are submitted by the Tribunal under section 256(2) of the Income-tax Act, 1961, for this court's opinion : " (i) Whether, on the facts and in the circumstances of the case and on a proper construction of section 40A(7) of the Income-tax Act, 1961, the Tribunal was justified in holding that the provision for gratuity which was paid to the Life Insurance Corporation of India under the group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was disallowed by the Income-tax Officer. The total sum paid was Rs. 12,030, but considering the length of the manager's service, the Income-tax Officer allowed Rs. 4,515 and the balance of Rs. 7,515 was added back. On appeal, the Appellate Assistant Commissioner further allowed Rs. 5,000 and confirmed disallowance of Rs. 2,515. The other point related to group insurance. An amount of Rs. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. The amounts disallowed were accordingly directed to be deleted from the total income of the assessee. Mr. Talukdar, learned standing counsel for the Revenue, contended that payment made to the Life Insurance Corporation under the group insurance scheme is not covered by clause (b) of sub-section 7 of section 40A of the Act and emphasising the non obstante clause, he argued that section 37 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision of the Act relating to computation of income. The Supreme Court in Shree Sajjan Mills Ltd. v. CIT [1985] 156 ITR 585 has categorically held that section 40A, in view of the non obstante clause therein, has an overriding effect over the provisions of any other section. Explaining the provisions of clause (a) of sub-section (7) of section 40A of the Act, which is made subject to clause (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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