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TMI Blog1984 (4) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... in holding that the provision for initial contribution to an approved gratuity fund is deductible under section 36(1)(v) of the Income-tax Act, 1961 ; 3. that, the Commissioner of Income-tax (Appeals), erred in law in allowing the deduction of Rs. 3,17,911 on account of provision for gratuity liability ignoring the provisions of section 155(13) of the Income-tax Act, 1961 ; 4. that, the Commissioner of Income-tax (Appeals), erred in law as well as on facts in allowing the provision for Rs. 3,17,911 for payment of gratuity for the period up to 31-3-1973 in the assessment for the assessment year 1974-75. " 2. In the original assessment the assessee claimed deduction of Rs. 81,497 being provision for payment of gratuity. The ITO negatived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not disentitle the assessee to the deduction if it was otherwise admissible under the law since the audited accounts indicated that there was provision for such initial contribution. Reliance was placed on the decisions in CIT v. Gangappa Cables Ltd. [1979] 116 ITR 778 (AP), Chokshi Metal Refinery v. CIT [1977] 107 ITR 63 (Guj.), CIT v. Ahmedabad Keiser-E-Hind Mills Co. Ltd. [1981] 128 ITR 426 (Guj.) and Nathmal Bankatlal Parikh & Co. v. CIT [1980] 122 ITR 168 (AP) (FB). It was also submitted that the initial contribution to an approved gratuity fund was deductible from the total income under section 36(1)(v) of the Act read with rule 104 of the Income-tax Rules, 1962 ('the Rules'). It was pointed out that the gratuity fund was approved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Surrendra Overseas Ltd. v. CIT [1979] 120 ITR 872 for the proposition that the ITO had no jurisdiction to consider the admissibility or otherwise of any deduction in the set aside assessment if that claim was not the subject-matter of consideration before the AAC. The learned departmental representative pointed out that the claim of the assessee regarding deduction towards gratuity liability before the AAC was confined to Rs. 81,497. He, therefore, submitted that the Commissioner (Appeals) was wrong in his finding that the assessee was entitled to deduction of Rs. 3,17,911 being provision for payment of gratuity. The learned counsel for the assessee, on the other hand, contended that the decisions of the Calcutta High Court in Katihar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r on the basis of actuarial valuation. Therefore, the AAC had occasion to consider the admissibility of the deduction regarding gratuity liability to the extent of Rs. 81,497 only. The claim of the assessee for deduction of Rs. 3,17,911 was made neither before the ITO nor before the AAC. That being the position, we are of the opinion that there was no patent mistake in the regular assessment which was sought to be rectified by the assessee by filing an application under section 154. As has been held by the Allahabad High Court in the case of Sharda Prasad v. CIT [1975] 100 ITR 373, deductions or rebates, although legally allowable but not claimed or allowed, do not constitute mistakes apparent from record. 6. It is pertinent to note that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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