1981 (7) TMI 29

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....e's business for the assessment year 1972-73 ? " The assessment year involved is 1972-73. The assessee made a provision for the payment of gratuity to its employees of Rs. 2,95,494 under the provisions of the West Bengal Payment of Compulsory Gratuity Act, 1971, which came into force during the year under consideration and claimed the same as a deduction as business expenses. The ITO did not accept the assessee's claim on the ground that the assessee had failed to produce any actuarial computation of its liability for the payment of gratuity. He, however, observed that the assessee's claim would be reconsidered on the submission of an actuarial certificate. In appeal, the AAC, however, observed that the assessee had not created any fu....

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....ngal Payment of Compulsory Gratuity Act, 1971. He also placed a copy of the actuarial certificate before the Tribunal. The learned departmental representative supported the order of the AAC. The Tribunal considered the submissions of the learned representatives of the parties and held as follows : " The West Bengal Payment of Compulsory Gratuity Act, 1971, came into force during the year under consideration. The provision for payment of gratuity under the Payment of Gratuity Act, 1971, has been held to be an allowable expenditure if ascertained on actuarial principles in the case of Tata Iron & Steel Co. Ltd. [1975] 101 ITR 292 (Bom) and the liability has been held to be an existing liability. The provisions of the West Bengal Payment....