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2011 (9) TMI 750 - HC - Income TaxApplicability of 40A(7) - assessee being a sick unit - gratuity to those who went for voluntary retirement - Held That:- Provision to tune of 32,63,863 was the actual amount payable during the relevant accounting year. - while Section 40A (7) of the Act deals with deduction on the provision made, Section 43B of the Act is with reference to the deduction on actual payment. As far as the present case is concerned, the assessee's case falls under Section 40A(7) of the Act. - Given the fact that Section 40A(7)(b) of the Act contemplates deduction in respect of the provision made, not only for the purpose of contribution towards the approved gratuity fund, but equally so for the purpose of payment of gratuity payable during the year, rightly the Commissioner of Income Tax (Appeals) granted the relief. - Thus 40A(7) was applicable - decided in favor of assessee.
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