JUDGMENT
Ajit Kumar Sengupta, J. – In this reference under s. 256(1) of the IT Act, 1961 for the asst. yr. 1973-74 the following question of law has been referred to this Court :
“Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the provisions of s. 40A (7) (a) of the IT Act, 1961 did not apply to a case where no provision on account of accrued liability for payment of gratuity to the workmen had been made in the accounts of the previous year relevant to the asst. yr. 1973-74 ?”
2. The assessees case is that prohibition contained in s. 40A(7) must be confined to a case where the assessee has actually set apart a sum by way of provision for the purpose of payment of gratuity. Where no provision was made for payment of gratuity, the bar contained in s. 40A (7) (a) will not apply and there is no legal impediment in allowing the claim of the assessee. This contention was rejected by this Court in the case of the CIT v. New Swadeshi Mills of Ahmedabad Ltd. reported in (1984) 147 ITR 163 (Cal). It appears to us that the question in this reference is concluded by the aforesaid decision. Following, the said decision we answer this question in this reference in the negative and in favour of the revenue.
3. There will be no order as to costs.
Dipak Kumar Sen, J. – I agree.