https://www.taxtmi.com/caselaws?id=19903 The court affirmed the Tribunal's decision to allow the entire provision for gratuity as a deduction in the computation of business income for the assessment year 1971-72. The court held that the provision, based on a scientific estimate of present liability, was deductible under the mercantile system of accounting. The court referred to legal precedents supporting the deductibility of such provisions before the introduction of section 40A(7) of the Income-tax Act, 1961. The court concluded that the provision for gratuity, even if related to earlier years, was a liability that arose when the scheme was first implemented and was therefore deductible. en-us Thu, 25 Aug 1994 00:00:00 +0530 Tue, 10 Nov 2009 14:20:58 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=19903 The court affirmed the Tribunal's decision to allow the entire provision for gratuity as a deduction in the computation of business income for the assessment year 1971-72. The court held that the provision, based on a scientific estimate of present liability, was deductible under the mercantile system of accounting. The court referred to legal precedents supporting the deductibility of such provisions before the introduction of section 40A(7) of the Income-tax Act, 1961. The court concluded that the provision for gratuity, even if related to earlier years, was a liability that arose when the scheme was first implemented and was therefore deductible. Case-Laws Income Tax Thu, 25 Aug 1994 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=19903