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2021 (4) TMI 911 - ITAT HYDERABADDisallowance of Employee Stock Expenditure (ESOP) - AO noticed from the computation for the AY under consideration that the assessee had added back an amount as ESOP Expenditure disallowed to the extent of options not exercised during the year - CIT(A) after considering the submissions of the assessee and following the decision of ITAT, Hyderabad in assessee’s own case [2017 (9) TMI 1595 - ITAT HYDERABAD] deleted the disallowance - HELD THAT:- We are of the view that the decision of the CIT(A) is in consonance with the decision of ITAT, therefore, we do not find any infirmity in the order of the CIT(A) and upholding the same, we dismiss the ground No. 2 raised by the revenue on this issue. Disallowance made u/s 43B towards gratuity provision - AO noticed from the audit report that an amount was claimed as “provision for gratuity” which remained unpaid as on the date of filing of return and the same was not disallowed in the computation of income - HELD THAT:- As gone through the orders of revenue authorities. In the case of CIT Vs Commonwealth Trust (P) Ltd.[2004 (4) TMI 51 - KERALA HIGH COURT], on which reliance placed by the assessee, the Hon'ble High Court of Kerala held that provision towards an approved gratuity fund is allowable u/ s 40A(7)(b) as deduction and is not hit by section 43B of the Act. The Hon'ble High Court of Kerala in the case of Chacko las Spinning and Weaving Mills Ltd Vs CIT [1989 (3) TMI 124 - KERALA HIGH COURT] held that provision made for contribution to approved gratuity fund shall be allowed as deduction u/s 40A(7)(b) of the Act and it is not necessary that there should be a payment by the assessee of for contribution towards an approved gratuity fund existing on the day when the provision is made or during the period for which the provision is made. Therefore, we see no reason to interfere with the order of CIT(A) in allowing the ground of assessee and upholding the same, we dismiss ground No. 3 raised by the revenue. Deduction on the basis of section 43B for provision made for an approved gratuity fund as deductible u/s 40A(7) - HELD THAT:- As sufficient internal accruals to fund the advance trust as well as considering the AO’s observations in assessee’s own case for AY 2008-09 following the Tribunal decision in AYs 2009-10 and 2010-11 that the loan to trust was made out of internal accruals and not from the borrowed funds, the CIT(A) allowed the ground of the assessee. DR could not bring any contrary decision against the decision of the Tribunal for AYs 2009-10 and 2010-11. Therefore, upholding the decision of the CIT(A), we dismiss the ground raised by the revenue on this issue.
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