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2015 (4) TMI 51 - AT - Income TaxDisallowance of gratuity paid of employees for non common cadre promoted to common cadre and ceased to be employees of bank - Held that:- It is pertinent to mention that the employees themselves demanded the gratuity and the letters of demand are on record at paper book 26 to 34 where it has been mentioned by each employee that he ceased to be employee of the assessee-bank with effect from the date mentioned in the letter and therefore, the assessee-bank was requested that the amount of gratuity of the service rendered by that employee in the assessee-bank be paid to the Punjab State Co-op. Bank Ltd., Chandigarh as per letter No.10983 dated December 29, 2006. The letter No. 10983 dated December 29, 2006, is a letter of the Punjab State Co-op. Bank Ltd., Chandigarh on record, where it has been asked by that bank to remit the amount of gratuity and leave salary contribution of non-cadre period in respect of non common cadre employees who were promoted as managers in the common cadre available at paper It is also pertinent to mention that the said employees ceased to be employees of the assessee-bank and therefore, the argument of the learned Departmental representative that the employees have not retired cannot be accepted. The assessee-bank and Punjab State Co-op. Bank Ltd., Chandigarh are different persons having separate permanent account number cards and separate legal entity and separately assessed to the Income-tax Department. Moreover, the Punjab State Co-op. Bank Ltd., Chandigarh vide letter dated July 27, 2001 has issued a letter to the manager of the Central Co-operative Banks of Punjab State to remit the said amount, which is available at paper book 15 and 16. In the facts and circumstances of the case, the assessee had not made the provisions for the gratuity to his employees which became payable during the year on their retirement and has been paid during the impugned year and therefore, the Commissioner of Income-tax (Appeals) is not justified in confirming the action of the Assessing Officer on this account. We reverse the order of the learned Commissioner of Income-tax (Appeals) and direct the Assessing Officer to allow the claim of the assessee with respect to gratuity paid amounting to ₹ 22,03,792. Accordingly, grounds of the assessee are allowed. - Decided in favour of assessee. Addition on interest was less charged from the customers - accrual of interest - Held that:- It was explained before the authorities below by the assessee that this is a consistent practice being followed by the assessee since beginning that any interest extra charged or lesser charged has to be adjusted in the next year. The assessee has submitted the details of interest lesser charged or over charged which has been accepted by the Department in the preceding year and consistent practice is being followed in the impugned year as well. Even there is no tax effect as incidence of tax in the impugned year as well as in the following year and in the preceding year is the same. In the present facts and circumstances, the right to receive has accrued only in the following year and the same has been charged in the following year itself. Therefore, the said charge cannot be made during the impugned year. The assessee has been following consistent method of practice and right to accrue the income had arisen in the following year which has been charged in the following year which is not under dispute. Accordingly, AO is directed to allow the claim of the assessee - Decided in favour of assessee.
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