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2014 (8) TMI 1127 - AT - Income TaxAllowable deduction u/s 36(1)(v) - Payment made by the assessee directly to LIC for group gratuity fund - Held that:- The disallowance has been made by lower authorities holding that the necessary registration of scheme was not obtained by the assessee, in our considered view, the controversy stands squarely covered in favour of the assessee by the Hon'ble Supreme Court judgment in the case of CIT Vs. Textool Co. Ltd. [2009 (9) TMI 66 - SUPREME COURT] wherein the similar payment made by the assessee directly to LIC for group gratuity fund was held to be allowable deduction U/s 36(1)(v) of the Act. We are inclined to hold that the assessee is entitled to deduction of payment of gratuity to the LIC. Deduction of provision of wage settlement - Amount of payment of arrears of salary - Held that:- There is no dispute on the facts that the amount of payment of arrears of salary in question was made consequent to the 13th wage settlement with all the stake holders. The genuineness of the payment is not challenged. The assessee is governed by regulatory laws of Rajasthan Cooperative Societies Act. The assessee’s liabilities towards wage revision having accrued and cryslatised by way of agreed settlement, the same is an allowable business expenditure as per Income Tax Act. The AS-I and II further supports the accounting done by the assessee in this behalf. Thus we hold that the assessee is eligible for deduction of provision of wage settlement Addition of bad debts - Liability for PACS - claim of PACS Manager Fund payment as expenditure - Held that:- The learned CIT(A) considered it to be a bad debt for which no reasons are given. In our considered view the PACS payment cannot be held to be a bad debt, therefore, what is relevant for us is the Assessing Officer’s order. The liabilities have been created by statutory rule which assessee is bound to follow. This provision has been created for amicability with the employees and is for the commercial benefit of the assessee bank and is to be held as wholly and exclusively for the purpose of business. In this eventuality, the payment is even otherwise allowable U/s 37 of the Act. Any perceived method of calculation by the Assessing Officer cannot be held as a tool to disallow the assessee’s claim. The revenue’s interest is safeguarded by a fact that if at all there is any mistake in the calculation, the access are short calculation will be given suitable treatment in books of account in subsequent years. This being so in our considered view, the assessee is eligible for claim of PACS Manager Fund payment as expenditure
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