Case Law Details
KMF Infotech Ltd Vs DCIT (ITAT Bangalore)
Conclusion : Provision for Gratuity was an ascertained liability eligible to be deducted from the net profit for the purpose of computing book profit u/s 115JB of the Income Tax Act.
Held: The only issue was whether “Provision for Gratuity” was an ascertained liability eligible to be deducted from the Net profit for the purpose of computing book profit u/s 115JB. It was held that the provision of gratuity in the assessee’s case was capable of being estimated with reasonable certainty and therefore, it was not a contingent or unascertained liability. Thus, it was an ascertained liability and the same fell outside the scope of the provisions of clause (c) of the Explanation 1 to section 115JB warranting no addition to the `book profits’.
FULL TEXT OF THE ITAT JUDGEMENT
These cross-appeals are directed against the asst. order passed by the AO u/s 143(3) r.w.s 144C of the Act pursuant to the directions given by ld Dispute Resolution Panel (DRP) for asst. year 2010-11.
Please become a Premium member. If you are already a Premium member, login here to access the full content.