1981 (1) TMI 64

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....For the assessment year 1964-65, Messrs. Balrampur Raj Electric Supply Co. Gonda, the assessee, claimed deduction of Rs. 2,07,071, being the initial contribution made by it for gratuity under the gratuity fund scheme. The scheme was recognized by the Commissioner on March 4, 1964. Under the scheme, all permanent employees of the assessee-company were to be paid gratuity at the rate of 15 days wage....

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....the mercantile system of accounting and the payments have been made for business purposes and in the capacity of a trader. The Tribunal observed that under s. 209 of the Companies Act, 1956, the assessee-company was liable to maintain records only for eight years. If the records prepared prior to 1960 were not available, no adverse inference could be drawn against the assessee and hence there was ....

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....s a matter covered by r. 104, which provides: " 104. The amount to be allowed as a deduction on account of an initial contribution which an employer may make in respect of the past services of an employee admitted to the benefits of a fund shall not exceed 8 1/3% of the employee's salary for each year of his past service with the employer." It is apparent that r. 104 does not specify with any ex....

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.... each year of his past service. In other words, the maximum initial contribution can be of one month's salary for each year. This limit has admittedly not been exceeded. It is doubtful if in these circumstances it can be claimed that r. 104 was not complied with. The Tribunal went on to hold that in the alternative even if it be held that the assessee has made any excess contribution the excess w....