https://www.taxtmi.com/caselaws?id=5911 SC held that gratuity becomes deductible only when it accrues and is payable on an employee's retirement or termination; until then it remains a contingent liability. Section 40A(7)(a) bars deduction for amounts provided out of current profits for future gratuity liabilities, subject to exceptions in 40A(7)(b) which exclude approved gratuity fund contributions, amounts payable within the year, and properly structured spread-over provisions meeting statutory conditions. The court endorsed a purposive construction of fiscal provisions and dismissed the appeals. en-us Tue, 08 Oct 1985 00:00:00 +0530 Thu, 30 Oct 2025 00:06:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=5911 SC held that gratuity becomes deductible only when it accrues and is payable on an employee's retirement or termination; until then it remains a contingent liability. Section 40A(7)(a) bars deduction for amounts provided out of current profits for future gratuity liabilities, subject to exceptions in 40A(7)(b) which exclude approved gratuity fund contributions, amounts payable within the year, and properly structured spread-over provisions meeting statutory conditions. The court endorsed a purposive construction of fiscal provisions and dismissed the appeals. Case-Laws Income Tax Tue, 08 Oct 1985 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=5911