(Petitions against the judgment and order dated February 2, 1982 of the Madras High Court in Tax Cases Nos. 584 to 587 of 1977. The judgment of the High Court is reported as V. D. Swami & Co. P.Ltd. v. C.I.T. (1984) 146 ITR 425 (Mad.).

Income-tax

----Business expenditure---Provision for gratuity made for the first time claimed as deduction---Appeal to Appellate Tribunal---Tribunal remitting matter to I.T.O. for fuller consideration as to whether provision was made on scientific basis---high Court affirming Tribunal's order observing that law on subject was settled by recent decision of Supreme Court---Implicit in High Court's order that I.T.O. will dispose of matter in accordance with law taking note of subsequent pronouncements of the Supreme Court.

In its decision in V.D. Swami & Co. P. Ltd. v. C.I.T. (1984) 146 ITR 425 (Mad.) to the effect, inter alia, that the order of the Appellate Tribunal remanding the matter to the Income-tax Officer for a fuller consideration as to whether the provision for gratuity made by the respondent for the first time was made on a scientific basis and directing the Income-tax Officer to allow deduction if the provision was so made was correct, the High Court observed that the law on the subject was settled by the decision of the Supreme Court in Vazir Sultan Tobacco Co. Ltd. v. C.I.T. (1981) 132 ITR 559. The Department preferred petitions for special leave to appeal to the Supreme Court. Dismissing the petitions, the Supreme Court observed that it was implicit in the order of the High Court that the Income-tax Officer should dispose of the matter, on remand, in accordance with law and that if there were subsequent binding pronouncements of the Supreme Court in the matter, the Income-tax Officer would take due note of them.

Vazir Sultan Tobacco Co. Ltd. v. C.I.T. (1981) 132 ITR 559 (SC) ref.

J. Ramamurthy, Senior Advocate S. Rajappa and Ms. A. Subhashini, Advocates for Petitioner.

Mrs. Janaki Ramachandran, Advocate for Respondent.

ORDER

We have heard Sri J. Ramamurthy, learned senior counsel for the petitioner, and Mrs. J. Ramachandran, learned counsel for the respondent.

The aspect on which the petitioner appears aggrieved is that the High Court, while sustaining the order of the Tribunal remitting the matter to the Income-tax Officer, proceeded to observe "by way of information," that the decision of this Court in Vazir Sultan Tobacco Co. Ltd. v. C.I.T. (1981) 132 ITR 559 had settled the law on the matter. Sri Ramamurthy says that there having been subsequent decisions of this Court on the same point, the Income-tax Officer should not feel bound to exclude from his consideration other---and according to Sri Ramamurthy, directly governing---latter decisions on the same point. There appears no justification for this apprehension. It is implicit in the order of the High Court that the Income-tax (Officer should dispose of the matter, on remand, in accordance with law. If there are subsequent binding pronouncements of this Court in the matter, it is needless to say, the Income-tax Officer will take due note of them.

With these observations, the special leave petition is dismissed.

M.BA./1227/T

Petition dismissed.