Law:

Section:

Keywords: Expenses, Contractual Obligation, Investments, Maintain, Evidence, Directors, Liability, Necessity, Obligation, Language, Recruitment, Provisions, Liquidation, Exception, Profits And Gains, Provident Fund, Consideration, Disposed Of, Remuneration, Disclose, Exemption, Contract, High Court, Discretion, Payment, Notice, Order, Decretal Amount, Profits, Representative, Assessment Year, Trading, Money, Allowances, Commission, Presumption, Appellate Tribunal, Capital Expenditure Result: Questions answered in the negative. JUDGMENT [ Jamaluddin H. Ahmad, J.]-The Income Tax Appellate Tribunal has referred to the High Court the following two questions: "1. Whether on the facts and circumstances of the Tribunal was justified in holding that the provision of Rs. 45,000 for tax payable on the accumulated Provident Fund balances of its retired employees was an admissible deduction under Section 10{2){xvi)? 2. Whether on the facts and circumstances of the case the Tribunal was justified in holding that a provision of Rs. 45,000 for tax payable on the accumulated Provident Fund balances of its retired employees was an admissible deduction under Section 10 {2){xvi) of the Income Tax Act as applied to E.P.T, by Section 19 of the E.P.T. Act of 1947". 2. The facts that gave rise to this reference are that the respondent Muslim Commercial Bank had some European employees on its staff who were to be paid 10% of their basic salary as Provident Fund according to the terms of their employment. Their own contribution towards the same was to be only 5% of their salary. It is said that some of these employees gave up the service of the respondent Bank and were paid of their accumulated balances of Provident Fund during the relevant years and the entire accumulation of the contribution by the employees was entertained by the Department as a proper revenue charged when paid. The respondent then provided a sum of Rs. 45,000 as Income Tax on the amount of this Provident Fund and claimed the same as permissible deduction within the meaning of s. 10(2)(xvz) in the assessment year ending 36-9-1957. The Assessing Officer refused to allow this deduction and in his order dated 29-…

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