TMI Blog1991 (1) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... incremental liability for gratuity pertaining to the accounting year relevant to the assessment year 1974-75 ? 2. Whether, on the facts and in the circumstances of the case, jeeps are only motor cars for the purpose of depreciation ? " The assessee is a limited company. In making the assessment for the assessment year 1974-75, the Income-tax Officer disallowed a sum of Rs. 3,07,238 being provision for gratuity on the ground that the conditions laid down in section 40A(7) of the Act are not satisfied. The Income-tax Officer also disallowed a sum of Rs. 4,493 being the excess cost of jeeps over Rs. 25,000. On appeal, the Appellate Assistant Commissioner upheld both the disallowances. As against the order of the Appellate Assistant Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... become payable during the accounting year ; (b) where a contribution is made towards an approved gratuity fund or a provision is made for such contribution ; and, (c) where a contribution is made towards an unapproved gratuity fund held under a trust. In view of the specific prohibition under section 40A(7)(a) of the Act, the provision for gratuity cannot be allowed as deduction, unless the assessee complies with the above-mentioned three conditions laid down in section 40A(7)(b) of the Act. Admittedly, the assessee in this case has not complied with the provisions of section 40A(7)(b) of the Act. As pointed out by a Division Bench of this court in Coimbatore Cotton Mills Ltd. v. CIT [ 1985] 154 ITR 240, in view of section 40A(7), no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pression jeep should be understood in the same way in which it is understood in ordinary parlance by the people who normally deal with it and, in common parlance, a jeep is not considered as a motor car. Learned counsel for the assessee further contended that jeeps are not motor cars for the purpose of the proviso to section 43(1) of the Act, because jeeps are transport vehicles which are used in construction works and for survey and inspection work through jungles and hilly terrains for which purpose motor car cannot be used and, considering the nature of the vehicles and the use to which jeeps are put, they cannot be considered as motor cars and, therefore, the cost of the jeeps cannot be restricted to Rs. 25,000. We are quite unable to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rld War II also called Peep. 2. a similar vehicle for civilian use." In Commr. of Agrl. I. T. v. Good Hope Plantation [1988] 170 ITR 173, a Division Bench of the Kerala High Court had occasion to consider the question whether the expression "motor car" in entry III-B(i) of the statement under rule 9 of the Kerala Agricultural Income-tax Rules, 1951, includes a jeep. The Division Bench of the Kerala High Court, while answering the question in the affirmative, held as follows (at p. 174) : , "The Tribunal, not surprisingly and in our view rightly, held that the expression 'motor car' includes a jeep. In common parlance, a jeep is understood as a sturdy motor car. That is in fact the dictionary meaning : the Concise Oxford Dictionary. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
