Ajit K.Sengupta, J. - (1.) In this reference under Section 256(1) of the Income-tax Act, 1961, for the assessment year 1975-76, the following question of law has been referred to this court : "Whether, on the facts and in the circumstances of the case, and having regard to the fact that the gratuity fund was approved with effect from March 27, 1976, the Tribunal was legally justified in holding that the conditions laid down in Section 40A(7) of the Income-tax Act, 1961, were fulfilled and the assessee was entitled to the deduction of Rs. 4,27,781 representing provision for payment of gratuity made in the previous year which ended 30th June, 1974 ?"
(2.) The facts are that the Income-tax Officer, while computing the income of the assessee, disallowed the assessee's claim for gratuity amounting to Rs. 4,27,781. The assessee, being aggrieved by the order of the Income-Officer, preferred appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals), by his order dated November 25,1978, upheld the order of the Income-tax Officer.
(3.) Being dissatisfied with the said order of the learned Commissioner of Income-tax (Appeals), the assessee brought the matter by way of a second appeal before the Appellate Tribunal. The Tribunal found that the recognition to the approved gratuity fund was granted by the Commissioner of Income-tax, West Bengal-V, Calcutta, with effect from March 27, 1976. The Tribunal held that the conditions laid down in Section 40A(7) of the Act were complied with and, therefore, the assessee was entitled to deduction of Rs. 4,27,781.;