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(1) the provision is made in accordance with an actuarial valuation of the ascertainable liability of the assessee for payment of gratuity to his employees on their retirement or on termination of their employment for any reason;

(2) the assessee creates an approved gratuity fund for the exclusive benefit of his employees under an irrevocable trust, the application for the approval of the fund having been made before the 1st day of January, 1976; and (3) a sum equal to at least fifty per cent. of the admissible amount, or where any amount has been utilised out of such provision for the purpose of payment of any gratuity before the creation of the approved gratuity fund, a sum equal to at least fifty per cent. of the admissible amount as reduced by the amount so utilised, is paid by the assessee by way of contribution to the approved gratuity fund before the 1st day of April, 1976, and the balance of the admissible amount or, as the case may be, the balance of the admissible amount as reduced by the amount so utilised, is paid by the assessee by way of such contribution before the 1st day of April, 1977.

(1) the provision was/is made in accordance with the actuarial valuation of the ascertainable liability of the assessee for payment of gratuity to his employees on their retirement or on termination of their employment for any reason;

(2) on the assessee creating an approved gratuity fund for the exclusive benefit of his employees under an irrevocable trust, the application for the approval of the fund having been made before the 1st day of January, 1976; and (3) by paying to the said fund a sum equal to at least fifty per cent. of the admissible amount, or where any amount had been utilised out of such provision for the purpose of payment of any gratuity before the creation of the approved gratuity fund, a sum equal to at least fifty per cent. of the admissible amount as reduced by the amount so utilised, before the 1st day of April, 1976, and the balance of the admissible amount or, as the case may be, the balance of the admissible amount as reduced by the amount as utilised by way of such contribution before the 1st day of April, 1977.

5. There is no controversy to the fact before us that the assessee created an irrevocable trust and paid to the said fund the entire amount of gratuity of its employees and that amount on which deduction is claimed for the year 1973-74 by it, i.e., Rs. 1,92,871, is within the limits of the admissible amount. The facts not in controversy thus are :

(1) The assessee has created an irrevocable trust before the 1st day of January, 1976, which fund has been duly approved in the year 1978 by the competent authority and has transferred the contributions to the said funds before the due date;

(2) It has claimed deduction only as respects the payment of gratuity to the employees in the financial year 1972-73. This fact is clearly established by the fact that the liability under the Payment of Gratuity Act, 1972, itself had arisen after September, 1972.

6. On the facts as above, thus, the questions to be answered are :

(1) Having created the irrevocable trust in the year 1975 and having transferred the gratuity payable to its employees before the due date when the liability itself had been created in the financial year 1972-73, whether the assessee fulfilled the conditions as stipulated under s. 40A(7)(b) of the Act ?