1987 (1) TMI 49

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..... to us by the Income-tax Appellate Tribunal, Cochin Bench, in terms of section 256(1) of the Income-tax Act, 1961. "Whether, on the facts and in the circumstances of the case, the assessee is entitled to claim 'the balance' gratuity under section 40A(7)(b)(ii) of the Income-tax Act in the assessment year 1975-76 ? " The assessee which is a limited company made a provision in its books of accou .....

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..... he considered to represent the provision relating to that accounting year. The Officer further allowed deduction of a sum of Rs. 85,040.67 being the amount actually paid by the assessee towards gratuity in respect of that year. The Officer, however, disallowed the assessee's claim to deduct a total sum of Rs. 6,99,188 representing what was provided for all the earlier years. The assessee challe .....

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..... mount of Rs. 6,99,188 claimed by the assessee represented what was provided for the three accounting years in question, i.e., 1972-73 to 1974-75, and that after taking into account what had been already allowed in the earlier orders of the Officer, the assessee was entitled to deduction of the balance gratuity amount. In the absence of a specific question concerning the finding of the Tribunal r .....

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..... n accordance with and subject tothe conditions mentioned thereunder. To derive the advantage of that subclause in respect of a provision made in the accounting year 1973-74, such provision ought to relate to the liability of that year. In fact, deduction for that year was allowed by the Tribunal and other authorities to the extent of Rs. 31,690. However, the provision made in that year in the sum .....

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..... 75-76 and not in relation to the earlier years. Accordingly, we answer the question referred to us in the negative, that is, in favour of the Revenue and against the assessee. We direct the parties to bear their respective costs in this tax referred case. A copy of this judgment under the seal of the High Court and the signature of the Registrar shall be forwarded to the Income-tax Appellate T .....

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