9911796707
TMI Blog1993 (2) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... nregistered firm an assessee to income-tax. We are concerned with the assessment year 1975-76. Since the firm stood dissolved, additional respondents Nos. 2 to 6 have been impleaded as parties in the original petition. The accounting period ended on March 31, 1975. During the previous year which ended on March 31, 1975, the assessee closed down its business, retrenched all its employees and sold t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ni Cashew Sales Corporation [1967] 65 ITR 643, the deduction is impermissible. As regards gratuity, the Appellate Tribunal took the view that it was different in character. It was further held that the liability to pay gratuity is not a liability that accrues to an employer only at one point of time, viz., when the liability is to be settled with the employees. It may be a contingent liability. Ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Income tax Officer ?" It is thereafter that the Revenue has filed this petition under section 256(2) of the Income-tax Act to refer the above question of law for the decision of this court. We heard counsel. The Income-tax Appellate Tribunal, in paragraph 6 of its order dated March 26, 1982, held thus : ". . . . It is true that the gratuity liability has been held in certain cases a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the business are just two events that have happened at the same time though it may not be considered to be just a coincidence. We feel that the decision of the Kerala High Court in the case of CIT v. Standard Furniture Co. Ltd. [1979] 116 ITR 751 [FB], cannot be distinguished in the manner in which it has been distinguished by the Commissioner of Incometax (Appeals). We feel that the ratio of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is services and that when such events happen in the normal course of carrying on of business, the liability would definitely be an expenditure allowable in the computation of the business income is 'a' finding of fact. Since the decision of the Appellate Tribunal is in accord with the Full Bench decision of this court, we are of the view that no referable question of law arises out of the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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