COMMISSIONER OF INCOME TAX Vs. LOYAL TEXTILE LIMITED

JUDGEMENT

(1.) IN this tax case reference by the Revenue, the two questions referred to us under section 256(1) of the Income -tax Act, 1961 (hereinafter referred to as "the Act"), in relation to the assessment year 1977 -78 are

(2.) IN so far as the abovesaid second question is concerned, learned counsel for the Revenue himself represents that the said question does not arise from the order of the Tribunal. Hence, we return the said question unanswered In so far as the abovesaid first question is concerned, clause (a) of section 40A(7) (which came into force with effect from April 1, 1973, by an amendment introduced by the Finance Act, 1975) of the Act provides thus

(3.) IT is clear to us from a plain reading of the said section 40A(7)(b)(i) that the said clause qualifies both the above parts. If really it qualifies only the abovesaid latter part, any amount of provision (or provision to any extent) made by the assessee for the purpose of contribution towards an approved gratuity fund, would be deductible, which could not be the intention of the Legislature in enacting the said provision