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2011 (1) TMI 1530 - AT - Income TaxDisallowance of amount paid to Approved Superannuation Fund - violation of Rule 87 of Income tax Rules - Whether expenditure of the nature described in section 30 to 36 of the income tax Act?- HELD THAT:- A contribution to approved superannuation fund is deductible in principle as long as the quantum of the said contribution does not exceed the prescribed limits. The limits are, however, prescribed only for the initial contribution and ordinary annual contribution to the fund. As a corollary to these limits having been prescribed, amounts paid in excess of such limits, towards initial contribution and for ordinary annual contribution, are not allowed as deduction. That is the only limitation for quantum of deduction under section 36(1)(iv). However, it is not in dispute that the amounts paid in excess of the 27% of salaries of the employees, are neither towards the ordinary annual contribution nor towards the initial contribution. This payment has been necessitated due to shortfall discovered in the course of actuarial valuation of the fund, and is in the nature of a one time exceptional payment to ensure that the superannuation fund is able to discharge its obligation. Its neither an annual contribution, nor an ordinary contribution - the very foundation of the impugned disallowance did not have legally sustainable basis; the amount was deductible, in principle, under section 36(1)(iv) and the restriction on deductibility, as set out in the said section as also in Rule 87, did not apply in this case. The conclusions arrived at by the CIT(A), though for the reasons other than the reasons adopted by the CIT(A), are correct and do not call for any interference - these grounds are dismissed. Disallowance of claim of bad debt CIT-A deleted the addition - HELD THAT:- Learned representatives fairly agree that the issue is now covered, in favour of the assessee, by Hon’ble Supreme Court’s judgment in the case of TRF. LTD. VERSUS COMMISSIONER OF INCOME-TAX [2010 (2) TMI 211 - SUPREME COURT]. In this view of the matter, the conclusions arrived at by the CIT(A), on this issue as well, do not call for any interference - This ground also dismissed. Appeal dismissed.
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