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2021 (8) TMI 1032 - AT - Income TaxDisallowance u/s 40(a)(ia) - provision for payment of gratuity - only reason for disallowance of assessee’s claim of deduction is due to non–approval of the gratuity scheme - HELD THAT:- When, it is fact on record that assessee has applied for approval of the gratuity scheme in the year 2007, non–approval of the said scheme even after more than 14 years is undesirable and has resulted in undue harassment to the assessee. Due to no fault of the assessee the deduction otherwise allowable has been denied As relying on case Narasu’s Spinning Mills [2015 (12) TMI 1553 - ITAT CHENNAI], M/S. VERIZON DATA SERVICES INDIA PVT. LTD [2015 (10) TMI 316 - ITAT CHENNAI], JAIPUR THAR GRAMIN BANK [2016 (11) TMI 794 - RAJASTHAN HIGH COURT] and JAIPUR THAR GRAMIN BANK [2016 (11) TMI 794 - RAJASTHAN HIGH COURT] No disallowance of deduction claimed towards provision made for gratuity fund can be made even during the pendency of assessee’s application for approval of the gratuity scheme. In the facts of the present appeal, as earlier discussed, there has been inordinate and unacceptable delay in disposing of assessee’s application seeking approval of the gratuity scheme. Pertinently, while completing the assessment for assessment years 2011-12 and 2014-15 in assessee’s own case, the AO himself has allowed deduction claimed towards provision created for gratuity, though, assessee’s application seeking approval of the gratuity scheme is still pending. Thus, considering the overall facts and circumstances of the case in the light of the ratio laid down in the decisions cited before us, we are of the view that the assessee is eligible to claim deduction of the contribution make towards the gratuity fund of the employees. Accordingly, we delete the impugned disallowance. Assessee Grounds are allowed.
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