The Tax Publishers2020 TaxPub(DT) 2227 (Del-Trib)

INCOME TAX ACT, 1961

Section 115JB

Provision for gratuity made on the basis of actuarial valuation could not be said to be an unascertained liability and added in terms of clause (c) to Explanation (1) to section 115JB.

MAT - Computation of book profit - AO made addition of provision made for gratuity -

AO while computing book profit of assessee-company under section 115JB made addition of provision made for gratuity on the ground that when provision for gratuity had been made on the basis of actuarial and actual payment of gratuity was deferred to a later date on happening of a certain event, namely, death or voluntary retirement of the employees which were unascertained events, and provision made by assessee was un-ascertained liability. Held: When provision for gratuity was being made on the basis of actuarial valuation, it could not be said to be an unascertained liability and added in terms of clause (c) of section 115JB.

Relied:CIT v. Echjay Forgings Private Limited (2001) 251 ITR 15 (Bom) : 2001 TaxPub(DT) 1103 (Bom-HC), Eicher Motors Ltd. v. DCIT (2004) 82 TTJ 61 (Ind) : 2004 TaxPub(DT) 0182 (Ind-Trib)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2008-09

INCOME TAX ACT, 1961

Section 14A

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