Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (8) TMI 763 - AT - Income TaxDeduction u/s 37 - Provision for Suraksha Fund - Suraksha Fund created by the order of Office of the Registrar, Co-operative Societies, Rajasthan - diversion by overriding title - Held that:- Any contribution made by the assessee to a fund which directly connected or related to carrying on assesee's business or which results in benefit to the assesee's business has to be regarded as deduction allowable u/s 37 of the Act. The decision of Hon'ble Apex Court in the case of Associated Power Co. Ltd. vs CIT (1995 (11) TMI 5 - SUPREME Court) is not applicable. - Decided in favour of assessee. Deduction u/s 37 - Premium paid to LIC leave encashment group scheme - CIT upheld disallowance - Held that:- Leave encashment is not a statutory liability and even in the case of provision being made the deduction was allowed as business expenditure, when the liability was not actually incurred in the previous year. It was not a provision which was disowned but an actual liability towards premium paid on insurance policy and the liability was allowable as a deduction u/s 37 being an expenditure incurred for the purpose of business - The CIT proceeded on a totally wrong premise in finding the claim to be only u/s 43B(f) and then disallowing it. The order of AO allowing deduction to assessee in the case of premium paid towards the valid insurance policy, ensuring the satisfaction of liability for leave encashment by the insurer cannot be held to be erroneous and was not liable to be revised u/s 263 for the reason of being prejudicial to the revenue - Following decision of CIT vs. Hindustan Latex Ltd. [2012 (6) TMI 713 - KERALA HIGH COURT] - Decided in favour of assessee.
|