TMI Blog1989 (6) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 1976-77, the following question of law has been referred to this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the sum of Rs. 1,16,081 representing provision for payment of gratuity was an allowable deduction in computing the total income for the assessment year 1976-77 ?" The dispute relates to the assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls) with the following observations : "We have heard the submissions of both the parties, considered the facts of the case and are of the opinion that the order of the Commissioner of Income-tax (Appeals) on this point does not require any change. There was no dispute about the fact that the assessee was under an obligation to contribute the disputed amount to the gratuity fund. Admittedly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax. The approval of the fund was not granted by the Commissioner before the assessment was completed. Section 40A(7)(b)(ii) prescribes three conditions for allowance of the deduction of the provision for gratuity. One of such conditions is that the assessee must create an approved gratuity fund for the exclusive benefit of its employees under an irrevocable trust, the application for the approv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or such approval to the gratuity fund. It is not the case here that the gratuity fund created by the assessee is not liable to be approved. Once the application has been made within the time prescribed by the Act to the Commissioner for approval, it is immaterial when such approval is accorded, inasmuch as the approval would relate back to the date of application for such approval. If, however, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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