Law:

Section:

Section 256, read with section 36(1)(v) of the Income-tax Act, 1961 - Reference - Question of law - Assessee-company paid an amount to an approved gratuity fund - Whether a referable question of law arose from Tribunal's order in holding that assessee was entitled to deduction of difference only of said amount and amount appearing as provision for gratuity in predecessor company's balance sheet - Held, yes FACTS The assessee-company claimed deduction of Rs. 2,84,445 paid to the approved gratuity fund. However, the department allowed deduction of Rs. 51,144 only on the ground that the assessee had actually paid Rs. 2,84,445 less the amount of Rs. 2,33,301 appearing as 'provision for gratuity' in the predecessor company's balance sheet. On appeal, the Tribunal upheld the order of the department. The reference application of the assessee was also rejected. On an application under section 256(2): HELD In the instant case a question did arise from the Tribunal's order and, accordingly, the Tribunal was directed to draw a statement of case and refer the same. CASES REFERRED TO Karimtharuvi Tea Estates Ltd. v. CIT [1964] 54 ITR 237 (Ker.) and Western Mechanical Industries (P.) Ltd. v. CIT [1977] 110 ITR 703 (Bom.). S.E. Dastur, Jahangir Mistri and Niranjan D. Lapashiya for the Applicant. G.S. Jetly, K.T. Sidhwa and Mrs. Manjula Singh for the Respondent. ORDER Sugla, J.-It was contended on behalf of Mr. Jetly, the learned counsel for the revenue, that nine questions raised by the assessee as questions of law are really questions of fact; and that in any event the questions are covered by the Kerala High Court decision in the case of Karimtharuvi Tea Estates…

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