Shree Sajjan Mills Ltd vs Commissioner Of Income Tax, M.P. Bhopal ... on 8 October, 1985
6. In our view, insofar as this Court is concerned, the issue is no longer res integra. Applying the principle of law laid down in Sajjan Mills case (supra), in Commissioner of Income-tax Vs. Kelvinator of India Limit- ed, (1994) 210 ITR 933 (Delhi), it was held that prior to the insertion of Section 40A(7), banning, except in the prescribed circumstances, allowance in respect of the provision of gratuity, which admittedly is not applicable in the present case, provision for payment of gratuity, if worked out on actuarial valuation under a scheme on scientific basis, is a permissible business expenditure in the year concerned for the assessees following mercantile system of accounting.