https://www.taxtmi.com/caselaws?id=20935 An assessee on the mercantile system could not claim deduction of actuarially valued gratuity liability under section 28 or section 37 where no provision was made in the accounts and the conditions of section 40A(7) were not satisfied. The liability was treated as contingent, and the fact that the assessee maintained mercantile accounting did not change its character into deductible expenditure. Section 40A overrides the general deduction provisions, so gratuity becomes deductible only when the statutory requirements are met. The deduction claim was therefore rejected and the question was answered in favour of the Revenue. en-us Tue, 15 Sep 1992 00:00:00 +0530 Wed, 18 Nov 2009 11:51:41 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=20935 An assessee on the mercantile system could not claim deduction of actuarially valued gratuity liability under section 28 or section 37 where no provision was made in the accounts and the conditions of section 40A(7) were not satisfied. The liability was treated as contingent, and the fact that the assessee maintained mercantile accounting did not change its character into deductible expenditure. Section 40A overrides the general deduction provisions, so gratuity becomes deductible only when the statutory requirements are met. The deduction claim was therefore rejected and the question was answered in favour of the Revenue. Case-Laws Income Tax Tue, 15 Sep 1992 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=20935