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TMI Blog1993 (10) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred the following questions for our opinion : " 1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in confirming the order of the Appellate Assistant Commissioner to allow the deduction of Rs. 20,00,000 being the amount transferred to the gratuity fund approved by the Commissioner of Income-tax as against Rs. 2,73,711 allowed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the assessee included provision for gratuity of Rs. 23 lakhs. After the assessment was finalised, the assessee, by its application dated March 30, 1977, applied for rectification under section 155(13) of the Income-tax Act, 1961, on the ground that the assessee had fulfilled the conditions laid down under section 40A(7) of the Income-tax Act. The Income-tax Officer took the view that only the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Income-tax took the view that in the normal course, it was unnecessary to go into the question of "incremental liability". He, however, went into that question and held that not only the provision for any particular previous year would be covered by section 40A(7) but also provision made for earlier years would be covered, subject to the condition that the provision was made in accordanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal, at the instance of the Revenue, the aforesaid questions are referred for our opinion. In Income-tax Reference No. 302 of 1981--CIT v. Petlad Turkey Red Dye Works Co. Ltd. [1995] 212 ITR 453, decided on October 4, 1993, we have dealt with a similar contention and upheld the order passed by the Tribunal. Considering Explanation 1 to section 40A(7)(b)(ii), we have held that the outer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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