1989 (9) TMI 95

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..... s : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the decision of the Appellate Assistant Commissioner of Income-tax that provision for gratuity amounting to Rs. 43,584 was a real liability to be allowed as a deduction under section 37(1) of the Income-tax Act, 1961 ?" The assessee is a company and the proceedings relate to the assessme .....

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..... tment's contention that the Central Board of Direct Taxes' Circular was subsequently withdrawn was not found acceptable by the Tribunal as the circular, was withdrawn after the assessment under reference was completed. Dr. Balasubramanian, learned counsel for the Department, has reiterated that the Board's circular relied upon by the Tribunal was subsequently withdrawn. It was urged that the ass .....

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..... According to him, the liability in respect of gratuity payable to whole-time directors was incurred by the assessee for the first time on October 12, 1971, i.e., when a gratuity scheme was adopted for them. It was, thus, contended that the entire liability was incurred during the year and was rightly allowed as deduction both by the Appellate Assistant Commissioner and the Tribunal In view of th .....

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