Srikakollu Subba Rao & Co. And Ors. vs Union Of India And Ors. on 3 March, 1988
6. The case was fixed up for hearing on 8th January, 1998. M. Gargieya the learned authorised representative appeared for the assessee. According to him the provisions of s. 43B will have no application to the case of the assessee in view of the specific provisions of s. 40A(7)(b)(i) of the Act. According to him the provision of s. 40A(7) have been on the statute w.e.f. 1st April, 1973, as inserted by the Finance Act, 1975. It carves out a special concession for an approved gratuity fund without which any provision "whether called as such or by any other name" made by the assessee for the payment to his employees on their retirement or on termination of their employment for any reason was to be disallowed as a deduction. It is, therefore, submitted that sub-cl. (i) of cl. (b) of s. 40A(7) is a specific provision which will have overriding effect on any other provision of the Act. Arguing further on the point, it was submitted that the amount was not hit by the provisions of s. 43B of the IT Act. According to him, the principle laid down by the decision in the case of Srikakollu Subba Rao & Co. vs. Union of India (1988) 173 ITR 708 (AP) is still a good law. Though the legislature has inserted Expln. 2 to the said section to overcome the decision of the Hon'ble Andhra Pradesh High Court referred to above, the ratio is still a good law and it is still applicable.