1994 (1) TMI 32

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..... of the Revenue, the Income-tax Appellate Tribunal, Ahmedabad Bench "B", has referred for the opinion of this court, the following question under section 18 of the Companies (Profits) Surtax Act, 1964, read with section 256(1) of the Income-tax Act, 1961 : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the gratuity .....

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..... rtax Officer and allowing the appeal of the assessee, directed the Surtax Officer to include the amount of the gratuity reserve as part of the capital to be computed for the purposes of the Second Schedule to the Act. The Revenue thereupon preferred an appeal before the Tribunal and the Tribunal held that the gratuity reserve was includible in computing the capital of the company for the purpose o .....

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..... owever, an ad hoc sum is appropriated without resorting to any scientific basis, such appropriation would also be a provision intended to meet a known liability, though a contingent one, for, the expression "liability" occurring in clause 7(1)(a) of Part III of the Sixth Schedule to the Companies Act includes any expenditure contracted for and arising under a contingent liability. However, if the .....

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