1990 (12) TMI 31

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.... for the assessment year 1973-74, it claimed that a sum of Rs. 1,96,402 towards gratuity liability should be deducted while computing the income. In the course of completing the assessment the Income-tax Officer allowed the claim of the assessee to the extent of Rs. 30,328 on the ground that only the incremental liability can be allowed and disallowed the balance of Rs. 1,66,074. On appeal by the ....

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....ual provision that would qualify for deduction during the year would be the incremental liability relevant to the assessment year and dismissed the appeal, confirming the disallowance by the authorities below. Under section 256(1) of the Act, the following question of law has been referred to this court for its opinion : "Whether, on the facts and in the circumstances of the case, the disallowa....

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....d be deductible. The second exception had been provided to relieve the hardship caused by the introduction of that sub-section and that permits allowance of such provisions relevant to the assessment years 1973-74 to 1975-76, subject to certain conditions which are (1) provision should be made as per the actuarial valuation of the ascertainable liability of the assessee for payment of gratuity, (2....

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...., had handed over the administration of the trust to the Life Insurance Corporation of India on March 1, 1976. Even so, as the assessee had not complied with the first of the conditions, referred to above, it cannot claim the benefit of deduction in respect of the entirety of the provision made for the gratuity and the actual provision that would qualify for deduction during the year would only be....