Section 43B Satisfied When Gratuity Liability Is Genuinely Discharged: ITAT Delhi

Adani Tracks Management Vs AO-CPC (ITAT Delhi) ITAT Delhi Allows Gratuity Deduction on Transfer of Employee Liability—Journal Entry Constitutes Discharge under Sections 40A(7) & 43B The Delhi Bench of the ITAT allowed the appeal of Adani Tracks Management Services Ltd. for AY 2020-21, holding that gratuity expenditure relating to an employee transferred to another group entity is allowable even where the liability is discharged through a transfer of obligation rather than direct cash payment to the employee. The Tribunal noted that while the CIT(A) had allowed gratuity to the extent of a...