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Section 43B, read with section 36(1)(va) of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed on actual payment - Assessment year 1992-93 - Whether contribution made by assessee to employees' gratuity fund, after due date for making such payment under law is not allowable deduction - Held, yes FACTS The assessee-company was deriving income mainly from the business of running a textile mill. The assessee claimed deduction in respect of the contribution to the employees, gratuity fund which was not paid by it within the due date for making such payment under law. The Assessing Officer disallowed the assessee's claim. On appeal, the Tribunal, without any discussion in the matter, allowed the claim of the assessee relying on it earlier decision, on actual payment basis. On appeal to the High Court: HELD In CIT v. South India Corporation Ltd. [2000] 242 ITR 114 (Ker.), the High Court held that the amount is deductible only if the assessee credits the amount to the employee's account in the relevant fund on or before the date, by which he is legally or contractually required to do so. The right to deduction would be lost even if the sum is credited after the due date. In view of the said decision, the order of the Tribunal was to be set aside and the order of the assessing authority to be restored. Note : The case was decided in favour of the revenue. CASE REVIEW CIT v. South India Corporation Ltd. [2000] 242 ITR 114 (Ker.) followed and relied upon. CASES REFERRED TO CIT v. South India Corporation Ltd. [2000] 242 ITR 144 (Ker.). P.K.R. Menon for the Appellant. P. Balachandran for the Respondent. JUDGMENT The matter arises under the Income-tax Act, 1961. The Revenue is the appellant. The respondent-assessee is a company deriving income mainly from the business of running a textile mill. The assessment of the respondent for the year 1992-93 was completed on a total income of Rs. 67,09,434 as against Rs. 61,36,906 disclosed in the return. This difference in the income assessed is on account of the disallowance of the claim for deduction of the contribution to the employees' gratuity fund not paid by the assessee within the due date for…

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