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TMI Blog1991 (1) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... etax Appellate Tribunal has referred the following two questions for the decision of this court : "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the reopening of the assessment was not valid ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that the payment to the Group Gratuity Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of Rs. 1 lakh was not allowable as a deduction. But it was allowed in the original assessment. The Income-tax Officer proposed to reopen the assessment to disallow the provision so made by the assessee for the period subsequent to September 6, 1976. The Income-tax Officer also disallowed the payment made to an unrecognised gratuity fund amounting to Rs. 84,559 since the Group Gratuity Scheme w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case [1976] 102 ITR 803 (Ker), the assessee is entitled to deduction of the gratuity amount. It is thereafter that the two questions of law formulated hereinabove have been referred to this court for decision. We heard counsel for the Revenue and also counsel for the assessee. It is true that the assessment was sought to be reopened to add back the purchase tax liability. The Inspecting Assistan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitiated under the prevailing law, the reassessment need not be confined to the particular item of income which alerted the Income-tax Officer to reopen the assessment. In this view of the matter, we answer question No. 1 referred to us in the negative, against the assessee and in favour of the Revenue. We hold the reopening of the assessment as valid. The Appellate Tribunal relied on High Land P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Appellate Tribunal holding that the payment to the Group Gratuity Scheme is an allowable deduction is an error. We decline to answer question No. 2 referred to us, but we direct the Income-tax Appellate Tribunal to restore the appeal to Me and decide the matter afresh in accordance with law and in the light of section 40A(7)(b)(i) of the Income-tax Act. 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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