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2021 (6) TMI 252 - AT - Income TaxDisallowance of provision to contribution to Gratuity Fund u/s.36(1)(5) - Addition u/s 36(1)(v) on account of gratuity contribution, through the gratuity fund was not approved under the Act - whether the assessee is entitled for the deduction for the contribution made to the gratuity fund which was not approved by the Commissioner of income tax under section 2(5) of the Act in the year under consideration? - HELD THAT:- To our understanding, the assessee should be vigilant enough to pursue its matter before the authorities. The assessee should not fold his hands on the reasoning that its job has done upon making the requisite application before the Commissioner of income tax under section 2(5) of the Act. Undisputedly the approval was granted under section 2(5) of the Act subsequently by the Commissioner of income tax with effect from 1st April 2012 - purpose of creating the approved gratuity fund was to ensure that the amount contributed by the assessee as the employer should leave the possession from its hands. In other words, the assessee should not have any control on the fund created for the welfare of the employees. In the case on hand, there is no ambiguity that there was no control of the assessee of whatsoever on the funds created by it for the welfare of the employees as the fund was invested with the LIC of India and LIC was directly paying amount to the employee on occasion of retirement. As relying on M/S TEXTOOL CO. LTD. [2009 (9) TMI 66 - SUPREME COURT] and PRAKASH SOFTWARE SOLUTION PVT LTD [2018 (1) TMI 956 - ITAT AHMEDABAD] there is hardly any doubt regarding allowability of deductions for any contributions made to an approved gratuity fund established under an irrevocable trust. Further, no deduction shall be allowed to an organization of any provision for payment of gratuity. Appeal of the revenue is dismissed.
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