TMI Blog1975 (5) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... lows the mercantile system of accounting. 2. The Kerala Industrial Employee's payment of Gratuity Act, 1970, came into force in February, 1970, that being the accounting year immediately previous to the accounting year relevant to this assessment year. But no claim for deduction of gratuity payable under that law was made in that accounting year. In this year the assessee claimed Rs 25,348.75 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... true that there should have been an actuarial valuation. Just because it was not done, the claim should not have been rejected. The ITO should have asked the assessee to file an actuarial valuation. But the Departmental Representative argued before us that the claim cannot be allowed at all under s. 37 because this is a claim of the nature described in s. 36(v) of the IT Act, 1961. We fail to see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt) and 95 ITR 151 (Delhi Flour Mills Company Limited vs. CIT (Delhi High Court) are followed and applied, it would become clear that the claim made by the assessee is an allowable deduction. So we find accordingly. 6. But this accounting year is not the first year of liability. This is the second year of liability. The first year of liability was in the previous assessment years. So in deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. We are assured that all the IT authorities in this region are aware of our guidelines laid down in those cases. So the assessee will have to produce an actuarial valuation of the liability for this yea before the ITO within a reasonable time. If not produced, the ITO may work it out in accordance with the guidelines laid down by us and if necessary after obtaining from the assessee further pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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