TMI Blog2017 (6) TMI 1234X X X X Extracts X X X X X X X X Extracts X X X X ..... be definition of Section 2(38) of the Income Tax Act. Thus, it is observed that fund constituted by the assessee under GCSA is to be treated at par with, fund recognized by the Chief Commissioner or established under the scheme formulated under the Provident Fund Act, as provided u/s.2(38) of the Act - section 36(l)(iv) and section 40A(9) would come in picture. They provide deduction of any expenditure incurred by assessee by way of contribution towards recognized fund. The assessee fulfills all these conditions. It has been allowed this deduction in the Asstt. Years 2004-05, 2006-07, 2008-09, 2009-10 and 2011-12. The assessment orders were passed under section 143(3) of the Income Tax Act. We allow the appeal of the assessee and direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was disallowed by the AO by assigning the following reasons: 5.1. I have carefully gone through the facts of the case and the arguments put forth by the Id. authorized representative of the assessee, on behalf of the assessee. Considering all these facts, the following facts emerge; (a) The so-called provident fund so operated by the assessee is an unrecognized fund and the assessee has not been authorized either to operate such funds nor was it authorized to do so. (b) The final investment of all contributions finds it way to fixed deposits, invested by the assessee in its own name. (c) The assessee itself is the sole decision-making authority in respect of the alleged Provident fund and it is not controlled by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Employees' Provident Fund Act. Thus, it was a valid fund constituted by the assessee and the contribution made to tins fund deserves to be allowed to the assessee. He drew our attention towards sections 71 and 72 of the GCSA, sections 36(1), 40A(9) and section 2(38) of the Income Tax Act. On the other hand, the Id. DR relied on the orders of the Revenue authorities below. 7. We have duly considered rival contentions and gone through the record carefully. We deem it pertinent to take note of sections 71 and 72 of GCSA. They read as under: 71. Investment of funds : 1. A society may invest, or deposit its fund, - (a) in a Central Bank, or the State Co-operative Bank, (b) in the State Bank of India, (c) in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions 36(1), 40A(9) and section 2(38) of the Income Tax Act. It read as under: Section 36 (1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein,- in computing the income referred to in section 28 - (iv) any sum paid by the assessee as an employer by way of contribution towards a recognized provident fund or an approved superannuation fund, subject to such limits as may be prescribed for the purpose of recognizing the provident fund or approving the superannuation fund, as the case may be; and subject to such conditions as the board may think fit to specify in cases where the contributions are not in the nature of annual contributions of fixed amounts or ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contained in part-A of the IVth Schedule. Definition further provides that if provident fund established under scheme formulated under the Employees' Provident Fund Act, 1952 then they would also be included in the provident funds which are stated to be recognized by the Pr. Chief Commissioner, Chief Commissioner, Commissioner etc. In other words, there are two categories of provident funds - one which has been recognized by these income tax authorities and other provident fund which was established under the scheme formed under the Employees' Provident Fund Act, 1952. Section 72 of the GCSA provides mechanism for establishment of Employees' Provident Fund. This fund will be governed by the Employees Provident Fund Act, 1952 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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