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2015 (8) TMI 1534 - AT - Income TaxDisallowance being the contribution made to employees’ superannuation fund - whether the contribution made by the assessee is allowable u/s 37? - HELD THAT:- In the case before the Madras High Court, Kattabomman Transport Corporation paid to the Government in order to enable the Government to credit the amount so paid to the Provident Fund Account of the Government employees who were at the point of time working in the Transport Corporation. The Government, after receipt of the amount from the Transport Corporation, credited to the Provident Fund Account of the concerned employees. In those circumstances, the Madras High Court found that the payment is not in any way affected by sec. 36 of the Act. The payment so made is deductible under sec. 37 of the Act, being part of the business expenditure. In this case also, by virtue of operation of section 20 of Tamilnadu Maritime Board Act, the erstwhile Government employees of Tamilnadu Port Department became the employees of Tamilnadu Maritime Board. The Government clarified in the letter dated 21.11.1996 that the employees so allotted to the Tamilnadu Maritime Board will have the same tenure, remuneration, rights and privileges - if the claim could not be allowed u/s 36 of the Act, the same has to be allowed u/s 37. Payment made by the assessee to the extent has to be treated as business expenditure in the hands of the assessee in view of the judgment of the Madras High Court in Kattabomman Transport Corporation Ltd.[1998 (9) TMI 2 - MADRAS HIGH COURT] - AO is directed to allow the claim of the assessee u/s 37. Appeal of the assessee stands allowed.
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