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M/s Man Structural Pvt. Ltd. Versus A.C.I.T. Circle-3, Jaipur.

2016 (9) TMI 1210 - ITAT JAIPUR

Payment made to LIC towards Group Gratuity Scheme disallowable U/s 40A(7) - Held that:- 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 vi .....

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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 - SHRI BHAGCHAND, AM AND SHRI LALIET KUMAR, JM For The Assessee : Shri P.C. Parwal (CA) For The Revenue : Shri .....

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U/s 40A(7) as the scheme is not approved and thereby confirming the disallowance made by A.O. He has further erred in not considering the fact that amount is paid under LIC Group Gratuity Scheme for which application dated 16/05/1996 moved to Commissioner for approval is not rejected and the issue is otherwise covered by various decisions of the Court but not considered/inferred correctly by him. 2. All the appeals of the assessee have been heard together, therefore, for the sake of convenience .....

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e 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 asse .....

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tion made by the assessee is not allowable. 4. The assessee feeling aggrieved by the order passed by the ld Assessing Officer has taken up the matter in the appeal before the ld CIT(A). The ld CIT (A) vide order dated 12/10/2015 has also dismissed the appeal of the assessee by observing as under: 3.1.2 (i) I have carefully perused the submission of the assessee, the assessment order and the material placed on record. During the appellate proceedings, it was submitted by the AR that the written s .....

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e Act as the gratuity fund was not approved by the Commissioner of Income Tax. Therefore, 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 .....

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s actually paid by the assessee. It was submitted that the payment of gratuity was made and it was also contended that the assessee made the payment to LIC by cheque dated 29/9/2009 i.e. before due date of filing of return but the LIC has issued receipt on 01/10/2009. It was also submitted that issue is covered by the judgment of Hon'ble Supreme Court in the case of CIT Vs Textool Co. Ltd. (2013) 216 Taxman 327 and the assessee has submitted that same is required to be upheld. 6. On the othe .....

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that the assessee was casual and callous in pursuing its application for grant of approval. It was further submitted that the condition made in Section 40A (7) of the Act are statutory and binding and the provisions cannot be read down as commenced by the assessee. Since the gratuity fund is not approved as required under 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 th .....

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to the fund created for the benefit of the employees in the form of 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 bas .....

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