TMI Blog2013 (4) TMI 947X X X X Extracts X X X X X X X X Extracts X X X X ..... same is dismissed as not pressed. 3. The only surviving ground relates to disallowance of an amount of ₹ 1,82,22,000/- towards gratuity payment to employee. 4. In course of scrutiny assessment proceedings, the Assessing Officer while examining the profit loss account for the impugned assessment year noted that the assessee had claimed an amount of ₹ 1,82,22,000/- towards gratuity payment. It was further noted from clause 6(a) to schedule 18 notes forming part of account that the gratuity liability fully covered in the new policy of LIC which is administered by a separate Trust. The Assessing Officer, therefore, required the assessee to clarify as to whether the contribution towards gratuity fund were made to an approved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003 as advance for FY 2003-04 towards payment of gratuity to employees. In this context, the learned counsel brought to our notice the receipts obtained from LIC towards payment to the gratuity fund. The learned counsel submitted that the payment has been made to LIC towards approved gratuity fund created by the assessee for the exclusive benefit of the employees. It was further submitted that the payments made to LIC towards contribution to gratuity fund having allowed in earlier as well as subsequent assessment year by the Assessing Officer. In this context, the learned counsel submitted before us copy of assessment order passed u/s 143(3) for the AY 2005-06. The learned counsel relying upon the judgment of the Hon ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the receipt obtained from LIC it is relevant to note that the amount of ₹ 1,75,81,818/- was paid as premium to the GGPE Scheme held in the name of the trustees of Sponge Iron India Ltd. employees gratuity fund, Hyderabad. Therefore, it has to be considered that the assessee has made contribution of the aforesaid amount towards payment of gratuity of the employees. The Hon ble Supreme Court while considering a case of similar nature in CIT V/s. M/s Textools Co. Ltd. (supra) held in the following manner: Having considered the matter in the light of the background facts, we are of the opinion that there is no merit in the appeal. True that a fiscal statute is to be construed strictly and nothing should be added or subtracted to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Department that the gratuity fund created with the LIC is not for the benefit of the employees. Further, Rule 101 of the IT Rules, 1962 authorizes making contribution under Group Gratuity Scheme entered with LIC. Therefore, considered in the light of the ratio laid down by the Hon ble Supreme Court in case of Textools Co. Ltd. (supra) the contribution made towards gratuity of the employees cannot be disallowed on the ground that it has not been paid to the approved gratuity fund but has been directly paid to the LIC. It is further pertinent to mention here that though the assessee has been regularly making payment to LIC towards gratuity of the employees, the same has never been disallowed by the department in the earlier assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X
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