1996 (9) TMI 52

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....ed in holding that the order of the Commissioner of Income-tax (Appeals) to the effect that the sum of Rs. 2,18,100 representing provision made for gratuity payable to employees who had retired during the relevant previous year not hit by the provisions of section 43B of the Act, was not sustainable? " The facts for the purpose of answering the question may be narrated as follows : The assessee is a company incorporated under the Companies Act, owning tea estates and carrying on the business of tea plantation, manufacture of tea and sale thereof. For the benefit of the employees of the tea garden, the assessee-company made a provision of Rs. 2,18,100 in respect of gratuity payable to the employees who retired during the relevant previ....

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....ee-company approached this court by filing the aforesaid Civil Rule No. 31(M) of 1992 before this court and this court directed the Tribunal to refer the question. Hence, the present reference. We have heard Mr. R. Gogoi, learned counsel appearing on behalf of the assessee, and Mr. G. K. Joshi, learned senior standing counsel appearing on behalf of the Revenue. Mr. Gogoi submits that the finding arrived at by the Tribunal is erroneous. In the facts and circumstances of the case, the Tribunal ought to have held that the assessee was entitled to get deduction of the amount earmarked for gratuity of retiring employees. Mr. Gogoi also submits before us that the assessee-company did not have a fund but the assessee is entitled to get deduc....

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....as drawn our attention that as the section begins with a non obstante clause, if there is no fund no deduction under any circumstances can be allowed even if there are provisions under the Act. Section 43B has completely taken away the right of the parties in respect of any benefit given in any other provision under the Act. Mr. Joshi further submits that under no circumstances the assessee is entitled to get the benefit of allowance without creating any fund. Mr. Gogoi, on the other hand, submits that there are three modes of payment of gratuity, namely, (1) having an approved fund, (2) by having a fund though not approved, and (3) when there is no fund but provision is made for payment of gratuity. In the first two cases payment has to....