Commissioner of Income Tax vs Lok Prakashan Ltd.

D.A. Mehta, J.—Tribunal, Ahmedabad Bench-A has referred the following question at the instance of the revenue u/s 256(1) of the Income Tax Act, 1961 (hereinafter referred to as ''the Act).

Whether, the Tribunal is right in law and on facts in deleting the gratuity provision of Rs. 4,49,100 ?

The assessment year is 1982-83 and the relevant accounting period is the financial year ended on 31-3-1982. Heard Mrs. M.M. Bhatt learned standing counsel for the applicant revenue. Though served, none appears for the respondent assessee.

Mrs. Bhatt has fairly invited attention to the fact that similar claim of gratuity payment was made in earlier assessment year and the assessing officer having followed his own order for earlier years disallowed the claim on the ground that as the assessee was following cash system in respect of the gratuity from 1977-78 onwards amount of Rs. 4,49,100 cannot be allowed in the year under consideration but is allowable as and when payment is actually made to the employees. The Tribunal has followed its own order for earlier assessment year. Mrs. Bhatt has invited attention to the unreported judgment of this Court dated 18-2-2003 between the same parties in IT Ref. No. 10 of 1989, wherein, identical issue was raised.

For the reasons stated, in the aforesaid judgment dated 18-2-2003 in assessee''s own case, the deduction claimed is held to have been rightly allowed by the Tribunal considering the provisions of Section 36(1)(v) of the Act.

The question referred for the opinion of this Court is, therefore, answered in the affirmative, that is, in favour of assessee and against the revenue. The reference stands disposed of accordingly with no order as to costs.