COMMISSIONER OF INCOME TAX Vs. NAGPAL OPTICAL CO

JUDGEMENT

(1.) AT the instance of the Revenue, the following question has been referred by the Income -tax Appellate Tribunal, Delhi Bench -D (in short 'the Tribunal'), under Section 256(1) of the Income -tax Act, 1961 (in short 'the Act'), for the opinion of this court :

(2.) A brief reference to the factual aspects would suffice :

(3.) THE assessed made a provision for Rs. 35,838 towards retrenchment compensation and gratuity and reflected it as a liability in its balance -sheet as on March 31, 1972. The assessed actually paid the amount to its employees on April 29, 1972. The Income -tax Officer rejected the claim of deduction of the amount for the reason that the liability did not accrue during the relevant assessment year. The Appellate Assistant Commissioner (in short 'the AAC'), before whom an appeal had been filed, endorsed the view of the Assessing Officer. His reasons for doing so were as follows :