COMMISSIONER OF INCOME TAX Vs. INDIA RADIATORS LIMITED

JUDGEMENT

(1.) THE assessee contributed a sum of Rs. 99,000 to the gratuity fund for the assessment year 1978-79. No details regarding the manner in which that amount was calculated and whether it is the liability of that year were furnished. THE Assessing Officer, after noticing that no details had been furnished, disallowed the claim for deduction on the ground that having regard to the large sum, it could be reasonably inferred that it includes not only the incremental liability of the year but of the earlier years as well. He, however, permitted the assessee to furnish a break-up and observed that the amount relatable to the assessment year would be allowed thereafter. THE Commissioner disagreed with that view of the Income-tax Officer and the Commissioner's view has been upheld by the Tribunal.

(2.) THE amount that could be contributed to the gratuity fund in respect of which deduction can be claimed is the amount of the incremental liability for that year. THE incremental liability for the past years cannot be claimed as deduction in the year in which the contributions came to be made. That was the view taken by this court in the case of CIT v. Pullicar Mills Ltd. [2000] 241 ITR 211.