9911796707
TMI Blog1988 (5) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... ed an application on 14th Nov., 1975 before the CIT for approval of the gratuity fund constituted under the Trust Deed dt. 14th Nov., 1975. The said approval was granted by the Commissioner by order dt.24th May, 1977 w.e.f. 14th Nov., 1975. The assessee made provision for the gratuity on the basis of actuarial valuation of Rs. 16,36,205 and paid the said sum said approved gratuity fund on 17th Nov., 1975. The claim of deduction of the said sum to the was negatived by the ITO on the ground that there was no gratuity fund in existence within the accounting period of the instant year and as such there was no contribution within the year towards an approved gratuity fund. Thus, according to the ITO, the claim of the assessee did not fall under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s Alkali and Chemical Corporation of India Ltd. In I.T.A No. 2523/ Cal/1979 and order dt. 30th Sept., 1983 of the Tribunal in Mopeds India Ltd. vs. IAC (1984) 7 ITD 324 (Hyd). 9. Learned departmental representative, on the other hand, made analysis of these provisions. According to him, sub-cl. (ii) is a special provision for the asst. yrs. 1973-74, 1974-75 1975-76 since the said sub-s. (7) of s. 40A was inserted in 1975 with retrospective effect from 1st April, 1973. Further, according to him, sub-cl.(i) is applicable to the asst. yr. 1976-77 onwards. Because of the retrospective operation, special concessions were given for the earlier years upto the asst. yr. 1975-76 which concessions do not ensure for the asst. yrs. 1976-77 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. (b) is applicable to the instant case. Deduction is permissible only when provision is made by the assessee for the purpose of payment of sum by way of any contribution to an approved gratuity fund. Such contribution to an approved gratuity fund must necessarily be during the year of account. In this connection, the following observations of Hon'ble Supreme Court in the case of Shree Sajjan Mills Ltd. at page 601 are pertinent: "On a plain construction of cl. (a) of sub-s. (7) of s. 40A of the Act, what it means is that whatever is provided for future use by the assessee out of the gross profits of the year of account for payment of gratuity to employees on their retirement or on the termination of their services would not be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the concession of filing the application at a date later than the close of the previous year is available only in respect of the asst. yrs. prior to 1975-76. Sec. 155(13) of the IT Act for amendment of the assessment order relates to the asst. yrs. 1973-74, 1974-75 1975-76. It has no application to the asst. yrs. 1976-77 and onwards. It is though mentioned in r.1(c) of the rules of the trust that the fund shall be deemed to have come into operation as on and from the first day of Oct., 1974 but such mention cannot enure to the benefit of the instant assessment year when the Commissioner has approved the gratuity fund w.e.f 14th Nov., 1975, obviously because the fund was created by the trust deed dt. 14th Nov., 1975 and there was no fun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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