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TMI Blog1991 (2) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to deduct the whole amount of gratuity liability computed in accordance with the directions of the Appellate Tribunal in I. T. A. No. 368/Coch/74-75 ?" The respondent is the Revenue. We are concerned with the assessment year 1971-72. The accounting year is the calendar year 1970. Before the Income-tax Officer, the assessee claimed deduction of a sum of Rs. 7.03 lakhs towards the liability to pay gratuity under the Kerala Payment of Gratuity Act. The Income-tax Officer disallowed the claim. In appeal, on the basis of actuarial valuation, The assessee restricted the claim in the sum of Rs. 2,18,646. A sum of Rs. 49,566 had already been allowed as payment on cash basis. In the appeal, the Appellate Assistant Commissioner accepted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation are both permissible. (2) It was common ground that, in the actuarial valuation furnished, future increments were taken into account. The Tribunal held that future increments have no place and the actuarial valuation should be made afresh without taking into account the future increments. After the remit, a fresh working of the liability was furnished to the Income-tax Officer. According to the fresh working, the gratuity liability would be Rs. 3,85,010. The Income-tax Officer held that the claim up to the sum of Rs. 2,18,646, actually allowed by the Appellate Assistant Commissioner in his order dated September 12, 1974, alone was permissible. In appeal, the Appellate Assistant Commissioner reversed the said decision by his order da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sistant Commissioner, by his order dated September 12, 1974, accepted the plea of the assessee regarding the deduction for gratuity payment and in view of the fact that a sum of Rs. 49,666 has already been allowed, directed the Income-tax Officer to allow the balance amount of Rs. 1,69,080. This order passed by the Appellate Assistant Commissioner dated September 12, 1974, was taken in appeal by the Revenue. The assessee was not aggrieved by the said order. It did not file an appeal or a cross-appeal before the Incometax Appellate Tribunal. Before the Appellate Tribunal, it was common ground that the actuarial valuation furnished by the assessee took into account future increments. The Appellate Tribunal held that it was an error and that f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther relief for the balance amount of Rs. 1,69,080. The assessee was not aggrieved by the said order. The assessee did not carry the matter in appeal nor did it file cross-objection in the appeal filed by the Revenue. In other words, the assessee was satisfied with the allowance of Rs. 2,18,646, on account of liability to pay gratuity. It was the Revenue which was aggrieved by the order of the Appellate Assistant Commissioner aforesaid. Before the Appellate Tribunal, it was common ground that, in working out the actuarial valuation, the figures furnished were wrong, in that, future increments were taken into account. The Tribunal held that future increments could not be taken into account and in order to work out the figures excluding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... error either in the reasoning or in the conclusion of the Appellate Tribunal aforesaid. In the light of our above discussion, we answer the question referred to this court by the income-tax Appellate Tribunal, in the affirmative, against the assessee and in favour of the Revenue, and further hold that the assessee is not entitled to deduct the whole amount of gratuity liability as claimed by it. It is only entitled to deduction of a sum of Rs. 2,18,646 which was allowed by the Appellate Assistant Commissioner by his order dated September 12, 1974. The said order has become final and conclusive and the assessee cannot, in view of the nature of the appellate order, claim a further sum of Rs. 1,66,364. The reference is answered as above. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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