9911796707
TMI Blog2012 (10) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... lakhs on account of gratuity provision without appreciating the fact that the assessee has made actual payment before the due date of filing of return." 2. Ground No. 1 - After hearing both the parties we find that during assessment proceedings the Assessing Officer noticed that the assessee-bank had made a provision for a sum of Rs. 2.00 lakhs towards education fee paid to HARCO. The same was disallowed because the same was only a provision. 3. Before the ld. CIT(A) it was submitted that the assessee has already incurred an expenditure of Rs. 1,33,884/- towards education fees. It was submitted that the assessee was following mercantile system of accounting and since it was statutory obligation under Rule 73 of Cooperative Societies Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses has been incurred in the next year the same has been disallowed. 7. We have heard the rival submissions carefully. We find that Registrar Cooperative Societies had enhanced the rates of contribution to various categories by the various types of Societies vide their communication dated 22.10.2002 vide which various Socieities have been directed as under: "From The Registrar Cooperative Societies, Haryana Chandigarh To All the Assistant Registrars Cooperative Societies in the State of Haryana Memo No. 8/3/2002-E&T(II)13761-792 Dated Chandigarh the 22.10.2002 Subject: Contribution of Education Fund by Cooperative Societies under Rule 73 of Haryana Co-operative Societies Rules, 1989 Your attention is invited to this off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of the above enhanced rates. While calculating the rate of contribution of Education Fund payable to Harcofed no Co-operative Society shall adjust the profit of the year in its accumulated losses. 3. The Education Fund shall be paid by the Co-operative Societies under the provisions of section 87 of the Haryana Cooperative Societies Act, 1984 read with Rule 73 of the Haryana Co-operative Societies Rules, 1989 and shall be charged on the funds of the Co-operative Socieites which shall be recoverable in a manner provided under section 110 of the said Act. 4 The above instructions are in suppressions of the previous instructions issued by this office vide Memo No. 8/3/94.E&T(II) dated 23.6.94 which should be brought to the notice of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self noted that the assessee has filed the details of payment of gratuity to employees as well as LIC. It was contended that actual payment was made to LIC against the provisions made. The assessee was first creating a provision then making the payment. The details of payment were furnished as under: "Date Amount 1.6.2006 Rs. 20.00 lacs 7.6.2007 Rs. 20.00 lacs 18.9.2007 Rs. 40.00 lacs In addition the appellant also made payment of Rs. 15,50,591/- during the year under consideration. " 11. The ld. CIT(A) after examining the submissions, did not find force in the same and confirmed the disallowance. 12. Before us, the ld. counsel of the assessee reiterated the submissions made before the lower authorities. He further submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year, any sum paid out of such provision by way of contribution towards an approved gratuity fund or by way of gratuity to any employee shall not be allowed as a deduction in computing the income of the assessee of the previous year in which the sum is so paid.]. :" Plain reading of the above provisions clearly shows that restrictions had been made in clause (a) that no deduction will be allowed in respect of provisions made towards payment of gratuity. However, this restriction is subject to exceptions provided in clause (b). Clause (b) clearly steps that wherever the provisions is made for the purpose of payment of contribution towards approved gratuity fund then this clause (a) is not applicable. It is not disputed that the payme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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