TMI Blog2015 (10) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 2003-04 the total contribution to the pension fund was ₹ 32,07,989/-. However, the payments made to the pensioners totaled to ₹ 56,33,188/-. We restrict the allowance of the expenditure in the hands of the assessee to the extent of pension contribution i.e. ₹ 32,07,989/- in assessment year 2003-04. In the totality of the above said facts and circumstances, we find merit in the claim of the assessee and the expenditure of ₹ 22,89,137/- is allowed in assessment year 2002-03 and expenditure of ₹ 32,07,989/- s allowed in assessment year 2003-04. - ITA Nos.785 & 945/Chd/2011 - - - Dated:- 27-3-2014 - SHRI T.R.SOOD, ACCOUNTANT MEMBER AND Ms. SUSHMA CHOWLA, JUDICIAL MEMBER For the Appellant : Shri B.K.Nohria For the Respondent : Shri Akshilesh Gupta, DR ORDER Per SUSHMA CHOWLA, J.M. : These two appeals filed by the assessee are against the separate orders of the Commissioner of Income Tax (Appeals), Panchkula, dated 16.5.2011 and 27.7.2011 relating to assessment years 2002-03 and 2003- 04 respectively against the order passed under section 143(3) of Income Tax Act, 1961 (in short the Act ). 2. The ground of appeal raised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r have given any details on this aspect of the issue. Instead, the assessee has requested that the deduction of the amount of actual payment of pension made during the year may be allowed in view of the provisions of section 37(1) and not under section 36(1)(iv). The Assessing Officer thus held that the plea of the assessee that the said expenses are allowable on account of pension being paid to the employees is not admissible at this juncture. The alternate plea of the assessee that the said deduction is also allowable under section 36 (1) (xii) of the Act was also rejected as the assessee was carrying on its business with profit motive and was not carrying on the business for development works as is the requirement under section 36 (1) (xii) of the Act. In view thereof, the claim of the assessee vis- -vis deduction on account of contribution to pension fund was upheld by the Assessing Officer in the second round of assessment proceedings. 7. Before the CIT (Appeals) the claim of the assessee was that the deduction on account of payment of pension to the employees during the year should be allowed in the hands of the assessee as the said expenditure has been incurred during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount contributed to pension fund maintained for the employees. The said contribution to pension fund was not allowed as deduction in the hands of the assessee as the pension fund was not recognized. The Tribunal in ITA Nos.56 369/Chd/2006 relating to assessment year 2002-03 and 2003-04 vide order dated 30.9.2008 vide paras 4 and 5 observed that the contribution made by the assessee to its PF scheme was allowable expenditure. However, as the pension scheme had been scrapped and the amount had been paid over to P.F. scheme,, the implication thereof was required to be viewed and as the said aspect has not been considered by either of the authorities below, the matter was remitted back to the Assessing Officer to examine the claim of the assessee afresh and to pass an order in accordance with law. 12. The claim of the assessee before the Assessing Officer in the second round of proceedings was that the said amount was first not contributed to a recognized pension scheme and was also not contributed to the P.F. scheme. However, the assessee during the year under consideration had made actual payments of pension to some of the employees who had retired during the period under con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,16,323.51 (B) 1 VARIOUS PAYMENTS MADE TO PENSIONERS DURING THE YEAR ENDED ON 31.3.2002 AS PER ANNEXURES-V, VI VI I ATTACHED. 22,89,137,00 2 BANK BALANCE 3,000.00 3 BALANCE OUTSTANDING 2,75,24,186.51 4 ICICI BONDS OF RS. 1.15 CRORES 1,15,00,000.00 TOTAL 4,13,16,323.51 13. Similarly in assessment year 2003-04 the pension fund Balance Sheet was filed on record and the status as on 31.3.2003 was as under: (RS.) 1. OPENING BALANCE- CA-02100011938 ADMN HFC EMPLOYEES PENSION FUND 3,000,00 2. OPENING BALANCE 2,75,24,186.51 3. PENSION CONTERIBUTION (ANANEXUEE-I) 32,07,989.00 4. ICIC1 BONDS OF RS=1,15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the year was ₹ 1.22 crores out of which ₹ 22,89,137/- were actually disbursed to the pensioners and hence the said expenditure of ₹ 22,89,137/- is allowable as an expenditure in the hands of the assessee for assessment year 2002-03. In assessment year 2003-04 the total contribution to the pension fund was ₹ 32,07,989/-. However, the payments made to the pensioners totaled to ₹ 56,33,188/-. We restrict the allowance of the expenditure in the hands of the assessee to the extent of pension contribution i.e. ₹ 32,07,989/- in assessment year 2003-04. In the totality of the above said facts and circumstances, we find merit in the claim of the assessee and the expenditure of ₹ 22,89,137/- is allowed in assessment year 2002-03 and expenditure of ₹ 32,07,989/- s allowed in assessment year 2003-04. The ground of appeal raised by the assessee in ITA No.785/Chd/2011 is allowed and in ITA No.945/Chd/2011 is partly allowed. 15. In the result, the appeal of the assessee in ITA No.785/Chd/2011 is allowed and the appeal in ITA No.945/Chd/2011 is partly allowed. Order pronounced in the open court on this 27th day of March, 2014. - - TaxTM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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