TMI Blog2014 (12) TMI 1356X X X X Extracts X X X X X X X X Extracts X X X X ..... SIONER OF INCOME-TAX [ 1998 (2) TMI 169 - ITAT JAIPUR], BECHTEL INDIA (P) LTD [ 2007 (11) TMI 2 - HIGH COURT , DELHI] and COMMON WEALTH TRUST (P.) LTD., COMMISSIONER OF INCOME-TAX VERSUS COMMON WEALTH TRUST (I.) LTD. [ 2004 (4) TMI 51 - KERALA HIGH COURT] Thus we uphold the order of the Commissioner of Income Tax (Appeals) in deleting the disallowance made for approved gratuity funds. -Decided in favour of assessee. - I.T.A.No.1551/Mds/2014 - - - Dated:- 12-12-2014 - Shri A.Mohan Alankamony Accountant Member And Shri Challa Nagendra Prasad, Judicial Member Appellant by: Mr. A.V. Sreekanth, JCIT Respondent by: Mr. Saroj Kumar Parida, Advocate ORDER Challa Nagendra Prasad, This appeal is filed by the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he claim of the assessee and deleted the disallowance observing that similar issue has been allowed in assessee s own case for the assessment years 2005-06 and 2006-07. 3. Departmental Representative vehemently supports the order of the Assessing Officer in disallowing the provision for gratuity submitting that since the said amount is only a provision and not paid is hit by the provisions of section 43B of the Act. 4. Counsel for the assessee relied on the order of the Commissioner of Income Tax (Appeals). He further submits that the Revenue in earlier years accepted the decision of the Commissioner of Income Tax (Appeals) in deleting the provision for gratuity for the assessment years 2005-06 and 2006-07 and no further appeal was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal was preferred by the Revenue and the order of the Commissioner of Income Tax (Appeals) was accepted. On a perusal of the decisions relied on by the assesse, we find that this issue has been considered by various High Courts and held that the provision made by the assessee towards contribution to approved gratuity fund is an ascertained liability and is allowable as deduction under section 40A(7)(b)of the Act. It was further held that the provisions of section 40A(7)(b) overrides section 43B of the Act. Similar view was also taken by the Third Member of Jaipur bench of this Tribunal in the case of Mewar Sugar Mills Ltd. Vs. DCIT (supra). 6. The Hon ble Kerala High Court in the case of CIT Vs. Common Wealth Trust (P) Ltd Anr. (supra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fund. This has to be treated as a special provision. The marginal note to section 43B clearly says certain deductions to be only on actual payment . It deals with various items. Section 43B(b) deals generally with any sum payable by the assessee as an employer by way of contribution to any provident fund at superannuation fund or gratuity fund or any other fund for the welfare of the employees. Of course, the gratuity fund is also referred to. Section'40A(7), clause (b), particularly subclause (i), thereof is a special provision in regard to a claim for deduction based on a provision made for payment towards I1n approved gratuity fund. There is no clear inconsistency between the two provisions, viz., sections 40A(7) and 43B. Section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ike s. 43B. Secondly, s. 40A(7)(a) which disallows deduction of any provision of gratuity to employees on their retirement is itself made subject to s. 40A(7)(b) which allows such deduction as long as it is made towards an approved gratuity fund. There is no dispute that in the instant case the provision made is towards contribution to an approved gratuity fund. Therefore the claim by the assessee for deduction on this score was clearly justified. We are accordingly of the opinion that no substantial question of law arises in this regard as well. 8. Respectfully following the said decisions, we uphold the order of the Commissioner of Income Tax (Appeals) in deleting the disallowance made for approved gratuity funds. 9. In the resul ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
