COMMISSIONER OF INCOME TAX Vs. TEXTOOL COMPANY LIMITED

JUDGEMENT

(1.) THE question referred to us is as follows :

(2.) IT seems that the assessee-company had made this payment to the Life Insurance Corporation of India (in short "LIC") as the said sum was insured by the LIC. There is no denial that the Textool Company Employees Group Gratuity Fund is a duly approved gratuity fund created for the exclusive benefit of the employees of the said company and that it is also an irrevocable trust. IT also could not be denied that the payments were made by the assessee-company directly to the LIC instead of a contribution towards the approved gratuity fund. However, the LIC had accepted the payment as on behalf of the Group Gratuity Life Assurance Scheme which was meant for the exclusive benefit of the employees under the policy issued by the LIC. Even the original master policy was produced before the authority and after going through the said policy, the authority had recorded its suggestion that the initial contribution of Rs. 50 lakhs as also the premium of Rs. 5,57,943 was paid on behalf of the assessee and was credited to the Group Gratuity Life Assurance Scheme on behalf of the assessee-company's group gratuity fund only.