JUDGMENT

SABYASACHI MUKHARJI, J.:— These appeals by special leave arise from the judgment and the order of the High Court of Madhya Pradesh dated 29th November, 1982 (reported in 1985 Tax LR 184), in reference under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as the Act). The assessee is a public limited company. The assessment year in Appeal No. 4221 of 1984 is 1974-75. In Appeal No. 4222 of 1984, the assessment year is 1973-74. The relevant accounting years ended on 31st March 1974 and 31st March, 1973 respectively.

2. For the assessment year 1974-75, the assessee company sought to deduct a sum of Rs. 18,37,727/- towards the amount of gratuity payable to its employees and worked out actuarially. The break up of this liability was as follows :- for periods ending on 31st March 1972, 31st March, 1973 and 31st March, 1974, assessees liability was worked out at Rs. 64,31,286/-. Out of this amount provision had been made during these years to the tune of Rs. 45,93,559/-. No provision had been made for the balance amount of Rs. 18,37,727/- The claim for deduction was set up on the ground that this liability was ascertained by actuarial valuation and was deductibl