Consistency in gratuity scheme deductions allowed where LIC contribution under an existing plan was accepted in earlier years.

Contribution paid to LIC under an existing group gratuity-cum-life insurance scheme was treated as an allowable deduction where the assessee had consistently claimed the expenditure in earlier years and the scheme had already been acted upon. The absence of the approval certificate before the lower authorities was not treated as decisive, because the factual record showed continuing acceptance of the scheme and eligibility of the payment under the Act. Applying the principle of consistency, the deduction was allowed and the disallowance was held unsustainable.

---

---

Issues: Whether the assessee was entitled to deduction of the premium paid to LIC under the group gratuity-cum-life insurance scheme.

Analysis: The payment was made to LIC under a gratuity scheme that had been acted upon in earlier years, and the assessee had been claiming the deduction consistently. The absence of the approval certificate before the lower authorities was treated as not ative where the factual matrix showed that the contribution was made under the existing scheme and the expenditure had been allowed in the past. Applying the principle of consistency and the settled approach to such gratuity payments, the claim was held allowable.

Conclusion: The assessee was entitled to deduction of Rs.89,632/- and the disallowance was unsustainable.

Ratio Decidendi: A contribution paid to LIC under an existing gratuity scheme cannot be disallowed merely for want of production of the approval certificate where the scheme has been consistently accepted in earlier years and the expenditure is otherwise shown to be eligible under the Act.

---