1997 (11) TMI 17

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ase and referred the following question of law for our opinion under section 256(1) of the Income-tax Act, 1961: "Whether the Tribunal was right in law in holding that in view of the provisions of section 40A(7) of the Income-tax Act, 1961, the applicant is not entitled to the deduction of the sum of Rs. 3,14,614 being the gratuity liability that has arisen under the provisions of the Payment o....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tant Commissioner held that no gratuity fund had been separately created which had been recognised by the Commissioner and actual transfer of the funds had not also been effected. The Appellate Assistant Commissioner, therefore, held that the assessee had not complied with all the three conditions provided in section 40A(7) of the Act and, therefore, the provision made towards the gratuity cannot ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....lity. We are, however, of the view that the statement made by learned counsel for the assessee is untenable. The Appellate Assistant Commissioner as well as the Income-tax Appellate Tribunal have found that the assessee had not complied with the requirements of section 40A(7) of the Act. Since the assessee had failed to fulfil the three statutory conditions prescribed under section 40A(7) of the A....