Provision for gratuity

Revenue contended that provisions for gratuity was correctly disallowed by the assessing officer as same were not admissible deduction; and that First Appellate Authority was not justified in deleting the addition, without appreciating that the actual payment made during the year was allowed

Taxpayer contended that claim of gratuity charged to cash flow statement was on the basis of actual and determined liability for the year which had been worked out on the basis of salary of each employee; that observations of assessing officer were neither correct, nor based on facts and law for the reason that the claim of gratuity being a determined and ascertained liability under Ss.32 & 34(3) of the Income Tax Ordinance, 2001, the claim was never disallowed

Appellate Tribunal confirmed the finding of First Appellate Authority and that of the Department was dismissed.