The question of law, so referred, was as follows Whether on the facts and in the circumstances of the case, the Appellate Tribunal is right in allowing the deduction of Rs.55,84,754/ being the payment made by the assessee companypany directly to Life Insurance Corporation towards Group Gratuity Fund under Section 36 1 v of the Incocme Tax Act, 1961?
By the impugned judgment, the High companyrt has answered the question of law, referred to it by the Income Tax Appellate Tribunal, Madras Bench for short, the Tribunal under Section 256 1 of the Income Tax Act, 1961, for short, the Act at the instance of the Revenue.
Being aggrieved, the assessee preferred appeal to the Commissioner of Income Tax Appeals .
Material facts relevant for the purpose of the present appeal may be stated thus For the assessment year, 1983 84, for which the relevant previous year ended on 30th April, 1982, the 2/ 2 assessee claimed a deduction of Rs.
50,00,000/ was paid to the LIC as initial companytribution in the group Life Assurance Scheme framed by the LIC for the benefit of the employees of the assessee and the remaining amount of Rs.
This appeal, by special leave is directed against the judgment, dated 4th February, 2002, rendered by the High Court of Judicature at Madras, in Tax Case No.
36,22,224/ under Section 40A 7 of the Act.
267 of 1989.
As per the breakup of the said amount, an amount of Rs.5,84,754/ was paid as annual premium to the Life Insurance Corporation LIC for short a sum of Rs.
25th February, 1983.
It is companymon ground that assessee companypanys gratuity fund, viz.,
Being dissatisfied with the view taken by the Commissioner, the Revenue took the matter in further appeal to the Tribunal.
While companypleting assessment, the Assessing Officer allowed a deduction of Rs.
36,22,224/ was shown as provision for initial companytribution.
92,06,978/ as companytribution provision towards the approved gratuity fund.
However, deduction for the balance amount was disallowed on the ground that payment towards the gratuity fund was made by the assessee directly to the LIC and number to an approved gratuity fund and, therefore, it was number allowable under Section 36 1 v of the Act.
Relying on its earlier decision in the case of Janambikai Mills Ltd, the Tribunal dismissed the appeal.
58,84,754/ as deduction for the relevant assessment year.
Consequently, the Commissioner allowed the said amount of Rs.
the Textool Company Ltd. Employees Group Gratuity Fund was approved by the Commissioner of Income Tax, companymbatore, w.e.f.
