JIT PAUL Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) IN this reference under s. 27(1) of the WT Act, 1957, the following questions of law have been referred to this Court for the asst. yrs. 1976-77 and 1977-78 :

(2.) IT is not in dispute that the first question is concluded by the decision of this Court in CWT vs. India Exchange Traders' Association (1992) 197 ITR 356. Accordingly, the first question is answered in the affirmative and against the assessee and in favour of the Revenue.

(3.) UNLIKE the earlier decision, the Madras High Court took a broader view in the later one. In deciding the issue it has taken notice of Standard Mills Co. Ltd. vs. CWT (1967) 63 ITR 470, where the Supreme Court held that gratuity is a contingent liability so long as there is no interposition of the gratuity trust to whom the company is under an obligation to pay yearly contribution towards gratuity liability.