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2012 (10) TMI 664 - AT - Income TaxDisallowance of Education fund - Held that:- Assessee-bank in the Cooperative sector was required to contribute 2% of profits subject to maximum limit of Rs. 2.00 lakhs towards education fund which is of statutory nature. Since the payment is of statutory nature the expenses has to be allowed on the basis of the provision - Order of the ld. CIT(A) is set aside and direct the Assessing Officer to allow Rs. 2.00 lakhs as expenses - in favour of assessee. Provision for Gratuity - Section 40A - Held that:- Plain reading of the provisions clearly shows that restrictions had been made in clause (a) that no deduction will be allowed in respect of provisions made towards payment of gratuity. - However, this restriction is subject to exceptions provided in clause (b). Clause (b) clearly steps that wherever the provisions is made for the purpose of payment of contribution towards approved gratuity fund then this clause (a) is not applicable. - It is not disputed that the payment to LIC was towards approved gratuity. Therefore, the provision towards gratuity could not have disallowed under clause (a) of Section 40A(7) of the Act. - in favour of assessee.
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