COMMISSIONER OF INCOME TAX Vs. N RADHA BAI

JUDGEMENT

(1.) AT the instance of the Revenue, the Income-tax Appellate Tribunal, Cochin Bench, has referred the following question of law for the decision of this court:

(2.) THE respondent is an assessee to income-tax. THE matter relates to the assessment year 1976-77. THE previous year ended on September 30, 1975. THE assessee provided for gratuity for the assessment years 1973-74 to 1975-76 at the rate of half month's salary. For the assessment year 1976-77, no provision was made. A sum of Rs. 2,92,541 was paid as premium to the Life Insurance Corporation. It related only to the assessment years 1973-74 to 1976-77. Out of the above, a sum of Rs. 30,034 was refunded subsequently. So, the assessee claimed a sum of Rs. 2,62,506 as a permissible deduction under Section 36(1)(v) of the Income-tax Act. THE Income-tax Officer disallowed the claim. It was reversed by the Commissioner of Income-tax (Appeals). On further appeal by the Revenue, the Income-tax Appellate Tribunal held that the payment was allowable as deduction under Section 36(1)(v) of the Income-tax Act. THEreafter, at the instance of the Revenue, the question of law formulated hereinabove was referred to this court for decision.