https://www.taxtmi.com/caselaws?id=20911 The court held that the company was not entitled to claim the liability for gratuity as a deduction under section 37 of the Income-tax Act, 1961, due to non-compliance with statutory provisions. The adoption of the cash system of accounting did not impact the disallowance of the deduction, as gratuity deductions must fulfill the conditions of section 40A(7) of the Act. The court emphasized that gratuity is an accrued liability for the employer, and contingent liability cannot be deducted even under the mercantile system of accounting. The court ruled in favor of the Revenue, denying the deduction claim for the liability for gratuity. en-us Tue, 08 Sep 1992 00:00:00 +0530 Wed, 18 Nov 2009 10:39:01 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=20911 The court held that the company was not entitled to claim the liability for gratuity as a deduction under section 37 of the Income-tax Act, 1961, due to non-compliance with statutory provisions. The adoption of the cash system of accounting did not impact the disallowance of the deduction, as gratuity deductions must fulfill the conditions of section 40A(7) of the Act. The court emphasized that gratuity is an accrued liability for the employer, and contingent liability cannot be deducted even under the mercantile system of accounting. The court ruled in favor of the Revenue, denying the deduction claim for the liability for gratuity. Case-Laws Income Tax Tue, 08 Sep 1992 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=20911