TMI Blog2016 (9) TMI 1210X X X X Extracts X X X X X X X X Extracts X X X X ..... approval of gratuity fund then the revenue cannot dispute that the assessee has not filed application for grant of approval of the gratuity fund. Moreover, in our view, once the revenue is accepting the status of the assessee being approved gratuity fund and has been extended the benefit of the approved gratuity fund after the application was initially filed on 13/5/1996, Now the revenue cannot deny the benefit merely on the basis of non-grant of the approval by the authorities. For the non action of the revenue, the assessee cannot be denied with the benefit of the pendency of the deduction on account of the above contribution made to the gratuity fund. - Decided in favour of assessee. - ITA Nos. 63 to 65/JP/2016 - - - Dated:- 16-8-2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fe Insurance Corporation of India (LIC) vide its letter dated 16/5/1996 asked the ld CIT to grant approval of the Group Gratuity Scheme. On the basis of the application made by the assessee with the respondent, the respondent has been contributing towards the group gratuity fund and has been claiming the deduction in terms of Section 40A(7) of the Income Tax Act, 1961 (in short the Act). The ld Assessing Officer in the assessment year 2008-09 has observed that the gratuity fund is not recognized by the ld CIT and therefore, the contribution made by the assessee was disallowed. Similar are the facts for the assessment year 2009-10 and also for assessment year 2012-13. The respondent revenue vide letter dated 11/12/2014 had informed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, this ground of appeal is rejected. Similar findings has also been given by the ld CIT(A) for the appeals of assessment years 2009-10 and 2012-13. 5. Now the assessee is in appeals before us. The ld AR of the assessee has submitted that the assessee has filed an application in the requisite form on 13/5/1996 and thereafter a letter was written by the LIC. The LIC being third party and custodian and executor of the fund, has also written letter. It was contended that it is for the revenue to grant approval to the assessee. It is submitted that the assessee has been making the payment pending approval for their deposited contribution with the LIC for the benefits of the employees of the assessee. The contribution made by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the law, therefore, the contribution made by the assessee cannot be allowed. 7. We have heard the rival contentions of both the parties and perused the material available on the record. It is, though, disputed that the application of the assessee for grant of approval, was not traceable in the office of the revenue but the assessee was able to produce the stamped copy of the application and the letter supporting the application dated 13/5/1996 before the Bench. It is also an admitted position that the LIC vide letter dated 16th May, 1996 has requested the revenue to grant approval. In our view, once the third party i.e. LIC is requesting the revenue to grant approval to the fund created for the benefit of the employees in the form of app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 36(1)(v) of the Act, it is manifest that the real intention behind the provision is that the employer should not have any control over the funds of the irrevocable trust created exclusively for the benefit of the employees. In the instant case, it is evident from the findings recorded by the Commissioner and affirmed by the Tribunal that the assessee had absolutely no control over the fund created by the LIC for the benefit of the employees of the assessee and further all the contribution made by the assessee in the said fund ultimately came back to the Textool Employees Gratuity Fund, approved by the Commissioner with effect from the following previous year. Thus, the conditions stipulated in Section 36(1)(v) of the Act were satisfied. H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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