COMMISSIONER OF INCOME TAX Vs. SANGHI OXYGEN COMPANY

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Jaipur, has referred the following two questions of law under Section 256(1) of the Income-tax Act, 1961, which have arisen out of its order dated December 30, 1978, in respect of the assessment year 1973-74 :

(2.) THE brief facts of the case are that the assessee is a registered partnership concern and derives its income from manufacture and sale of oxygen gas, acetylene gas, etc. In the relevant previous year ending on March 31, 1973, the assessee has actually paid Rs. 4,000 by way of gratuity to certain employees who had retired. A claim of Rs. 21,669 was also made by the assessee as payable for gratuity. This claim was not allowed by the Income-tax Officer on the ground that the conditions laid down in Section 36(1)(v) and Section 40A(7)(a) were not satisfied. Since this amount was not debited in the profit and loss account, no addition was made while disallowing the claim of the assessee.

(3.) SECTION 28 of the Act provides :