TMI Blog2015 (6) TMI 1204X X X X Extracts X X X X X X X X Extracts X X X X ..... e. - Decided against revenue. - I.T.A.No.611/Mds/2012 - - - Dated:- 12-6-2015 - Shri N.R.S. Ganesan, Judicial Member And Shri D. Karunakara Rao, Accountant Member Appellant by: Shri P. Radhakrishnan, JCIT Respondent by: Shri Vikram Vijayaraghavan, Advocate ORDER D. Karunakara Rao, This is the appeal by the Revenue against the order of the Commissioner of Income-tax (Appeals)-III, Chennai, dated 1.12.2011, for assessment year 2005-06. 2. The grounds in the appeal are argumentative in nature and, in our opinion, the issue raised in the grounds relates to allowability of provision for gratuity debited to the Profit Loss Account and the applicability of provisions of section 43B and 40A(7) of the Act. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. The CIT(A) has directed the Assessing Officer to delete the addition. Aggrieved with the same, the Revenue is in appeal before us. 5. Before us, the ld. Departmental Representative relied on the order of the Assessing Officer. 6. Per contra, the ld. Counsel for the assessee relied on the detailed finding given by the CIT(A) in paras 4, 4.1. and 4.2 of the impugned order and the decisions cited in the said paragraphs. Further, the ld. Counsel for the assessee filed a copy of the order of this Tribunal in the assessee s own case in I.T.A.No.1551/Mds/2014 for assessment year 2007-08 dated 12.12.2014, and submitted that similar issue came up for adjudication before the Tribunal. Relying on the decisions of CIT vs Commonwealth Trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue 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) held as under:- Section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 sub-clause (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 40A(7) is in negative terms and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 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. 8. On perusal of the above, we find that the issue adj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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