TMI Blog1983 (4) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... following two questions as arising out of the order of the Tribunal: "1. Whether the Tribunal was right in law in holding that the gratuity liability relating to the employees of Pandian Roadways Corporation Ltd., transferred to Kattabomman Transport Corporation Ltd., is not an allowable deduction? 2. Whether the Tribunal was right in holding that the payment was Ion capital account? " But t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Ltd. The assessee in the course of the computation of the assessee's income by the ITO for the assessment year 1974-75, claimed deduction of the said sum as revenue expenditure. The ITO rejected the claim for deduction. The disallowance of the claim was upheld by the AAC. The assessee took the matter in appeal to the Income-tax Appellate Tribunal. The Tribunal also has taken the view that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l has relied in support of its view on the decision of this court in Stanes Motors (South India) Ltd. v. CIT [1975] 100 ITR 341. Before the Tribunal, the decision of the Kerala High Court in CIT v. Standard Furniture Co. Ltd. [1979] 116 ITR 751 (FB), was relied on, but the Tribunal has distinguished the case on facts and purported to follow the decision of this court in Stanes Motors (South India) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Srinivasa Perumal Bank Ltd. [1981] 131 ITR 692. But we find that in those cases the gratuity liability has been worked out and those amounts have actually been paid to the employees whose services with the assessee had come to an end after the transfer of a portion of the business. On the facts of these cases, it has rightly been held that the actual payment of gratuity to the employees can be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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