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TMI Blog1962 (9) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... this case, the sum of ₹ 21,000 paid to the munim, Jagannathji, was an allowable deduction under section 10(2)(xv) of the Act?" The assessee is a registered firm. In the assessment proceedings for the year 1955-56 the claimed a deduction of ₹ 21,000 on the ground that the amount was paid to its ex-munim, one Shri Jagan- nathji, as gratuity at the time of his retirement. The Income-tax Officer disallowed the deduction holding that there was no evidence to show that the assessee used to pay such gratuity to its employees or that the payment was made in the future interest of the business. He relied on Gordon Woodroffe Leather Manufacturing Co. Ltd. v. Commis- sioner of Income-tax*. The Appellate Assistant Commissioner also re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding the Tribunal held that the deduction could not be allowed under section 10(2)(xv) of the Act. The point raised in this reference is concluded by the decision of the Supreme Court in Gordon Woodroffe Leather Manufacturing Co. Ltd. v. Commissioner of Income-tax [1957] 31 I.T.R. 438 upholding the decision of the Madras High Court in Gorden Woodroffe Leather Manufacturing Co. Ltd. v. Commissioner of Income-tax [1962] 44 I.T.R. 551 (S.C.). That was a case in which an employee of the managing agent of the assessee company was paid a gratuity of ₹ 40,000 by the assessee company "in appreciation of his long and valuable services to the company". It was not the practice of the company to pay such gratuities and in fact the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pediency. The burden of proving the circumstances for allowing a deduction, as stated by the Supreme Court, was clearly on the assessee. The assessee has failed to do so. That being so, the question referred to us must be answered in the negative. Shri Chitaley, learned counsel for the assessee, while admitting that there was no evidence to show that the gratuity was paid to Jagan- nathji on the ground of commercial expediency and in order indirectly to facilitate the firm's business said that the case should be referred back to the Tribunal for a supplementary statement with regard to the question whether the money paid to Jagannathji was expended on the ground of commercial expediency for facilitating the firm's business. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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