1975 (5) TMI 23

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....gratuity. The accounting year is the year ended 31st May, 1971. The assessee follows the mercantile system of accounting. 2. The Kerala Industrial Employee's payment of Gratuity Act, 1970, came into force in February, 1970, that being the accounting year immediately previous to the accounting year relevant to this assessment year. But no claim for deduction of gratuity payable under that law wa....

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....ting year. Under that wrong impression, he upheld the disallowance. 4. It is true that there should have been an actuarial valuation. Just because it was not done, the claim should not have been rejected. The ITO should have asked the assessee to file an actuarial valuation. But the Departmental Representative argued before us that the claim cannot be allowed at all under s. 37 because this is ....

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....of Lords, 92 ITR 503 Madho Mahesh Sugar Mills (P) Ltd. vs. CIT (Allahabad High Court) and 95 ITR 151 (Delhi Flour Mills Company Limited vs. CIT (Delhi High Court) are followed and applied, it would become clear that the claim made by the assessee is an allowable deduction. So we find accordingly. 6. But this accounting year is not the first year of liability. This is the second year of liabilit....