https://www.taxtmi.com/caselaws?id=15179 The High Court held that the provision for gratuity made by the corporation was not deductible under section 40A(7) of the Income-tax Act, 1961. Despite the acquisition of the corporation by the Government, the court emphasized that gratuity is a contingent liability and not entitled to deduction unless specific conditions are met. As the provision did not represent a contribution towards an approved gratuity fund or for gratuity payable during the previous year, it was considered a contingent liability. Therefore, the assessee was not entitled to deduct the provision for gratuity in arriving at taxable profits, affirming the Tribunal's decision. en-us Wed, 22 Apr 1998 00:00:00 +0530 Mon, 03 Aug 2009 15:29:37 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=15179 The High Court held that the provision for gratuity made by the corporation was not deductible under section 40A(7) of the Income-tax Act, 1961. Despite the acquisition of the corporation by the Government, the court emphasized that gratuity is a contingent liability and not entitled to deduction unless specific conditions are met. As the provision did not represent a contribution towards an approved gratuity fund or for gratuity payable during the previous year, it was considered a contingent liability. Therefore, the assessee was not entitled to deduct the provision for gratuity in arriving at taxable profits, affirming the Tribunal's decision. Case-Laws Income Tax Wed, 22 Apr 1998 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=15179