PERIA KARAMALAI TEA AND PRODUCE CO. LTD. VS COMMISSIONER OF INCOME-TAX
2001 P T D 2467
[247 ITR 817]
[Supreme Court of India]
Present: B. N. Kirpal and A. P. Misra, JJ
PERIA KARAMALAI TEA AND PRODUCE CO. LTD.
Versus
COMMISSIONER OF INCOME‑TAX
Civil Appeal No.22 of 1989, decided on 10/02/1998.
(Appeal from the judgment and order, dated March 20, 1987 of the Kerala High Court in I.T.R. No.363 of 1982).
Income‑tax‑‑‑
‑‑‑‑Gratuity‑‑‑Provision to be made in relevant accounting year‑‑‑Provision made in assessment year 1975‑76 regarding liability which arose prior to March 31, 1974‑‑‑Deduction not allowable in assessment year 1975‑76‑‑ Indian Income Tax Act, 1961, S.40A(7)(b)(ii).
From the decision of the Kerala High Court (see (1987) 167 ITR 32), that the provision for gratuity in respect of liability which arose prior to March 31, 1974, could not be allowed in the assessment year 1975‑76 because (i) the assessee had not made provision in the accounting period for that assessment year, and (ii) the Tribunal had not taken into account Explanation 1 to section 40A(7)(b)(ii) of the Income Tax Act, 1961, which spoke of "admissible amounts", the assessee preferred an appeal to the Supreme Court. The Supreme Court dismissed the appeal.
CIT v. Periya Karamalai Tea and Produce Co. Ltd. (1987) 167 ITR 32 affirmed.
T.L.V. Iyer, Senior Advocate (Mrs. Janaki Ramchandran, Advocate with him) for Appellant.
Ranbir Chandra, Ms. Shashi Kiran and B. Krishna Prasad, Advocates for Respondent.
ORDER
The High Court (see (1987) 167 ITR 32), has answered the question of law which was referred to it in favour of the Revenue by coming to the conclusion, on interpreting section 40A(7)(b)(ii) of the Income Tax Act, 1961, that the appellant was not entitled to claim deduction of Rs.11,96,413 which had been allowed by the Tribunal, because it had not made provision for the said amount in the accounting years relevant to the respective assessment years. In respect of the assessment year 1975‑76, with which the High Court was concerned, it was found that the said sum of Rs.11,96,413 was not in respect of the accounting year relevant to the assessment year 1975‑76 and, therefore, was not allowable as a deduction.
We do not find any infirmity in the decision of the High Court and, therefore, this appeal is dismissed with no order as to costs.
M.B.A./1002/FCAppeal dismissed.