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TMI Blog2019 (7) TMI 1681X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the ld.CIT(A) in allowing the contribution to Pension Fund Trust amounting to Rs. 9,97,52,210/-. 2.2 In this regard, ld.AR submitted that the matter has been decided by the Co-ordinate Bench of this Tribunal in assessee's own case for assessment year 2009-10 in ITA No.1464/Mds/2014 dated 22.08.2014 wherein the relevant finding is contained at paras 6 & 7 of the order of Tribunal which is reproduced as under:- ""6. We have heard the submissions made by the representatives of both the sides and have perused the orders of the authorities below. We have also examined the decisions on which the respective sides have placed reliance and the documents placed on record by the ld.Counsel for the assessee in the form of Paper Book. The first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. The case of the assessee is supported by the decision of the coordinate bench of the Tribunal in the case of Stanmore (Anamallay) Estates Ltd., Vs. ITO (supra). In the said case, the assessee-company along with other four sister companies created a joint gratuity fund for the exclusive benefit of its employees under on irrevocable trust. The CIT in proceedings u/s.263 raised similar objection that the assessee is not contributing towards fund approved by the jurisdictional Commissioner. The co-ordinate bench of the Tribunal held that contributions to approved gratuity fund being a common fund set by the assessee-company along with sister companies cannot be dis-allowed on the ground that it was not exclusive fund for the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld as under: "3. Accordingly, the case was posted for hearing and the assessee was asked cc furnish necessary documents and evidences in support of their claim. In response, the assessee appeared and represented that the damages paid for remittance to Pension fund trust is nothing but interest @ 9.5% on the delayed pay pent monthly contribution and the payments were compensatory in nature and not a penalty In support, the assessee company had furnished Government's order, details of interest paid and detailed explanation in this regard. Considering the reply furnished, the assessee's claim of damages for remittance if Pension fund trust for Rs. 2,35,91,384/ is allowed." furnishing a copy of interest rate declared by Pension Fund accumul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the I.T.Act,1961. Hence, the Assessing Officer disallowed this expenditure claimed of Rs. 7,81,274/- to the income of Appellant. Before me, the Appellant submitted that the Secretary to the Transport Department is the Chairman to all the State Transport Corporation in Tamil Nadu and the office is functioning at the Secretariat, Chennai with a separate Chairman's office comprising of five officers on deputation from various transport corporations. The function of this office is to co=ordinate the details required by the Government and other Govt. departments then and there. Since this is an exclusive nodal and administrative office for all the transport corporations the administrative expenses are shared equally by all the State Transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of the case are exactly identical as in ITA No.813/Chny/2018 for assessment year 2008-09. Therefore, our findings and directions contained in ITA No.813/Chny/2018 in para Nos.4 & 5 of this order shall apply to Ground Nos.1 & 2 raised in Revenue's appeal in ITA No.814/Chny/2018 for assessment year 2012-13. Hence, the grounds so taken for remittance to Pension Fund Trust by the Revenue are dismissed. 9. In respect of Ground No.3 & 4 of the Revenue's appeal, the Revenue has challenged the action of the ld.CIT(A) in restricting the disallowance u/s.14A read with Rule 8D Income Tax Rules,1962 to the extent of exempt income amounting to Rs. 6,63,236/-. In this regard we refer to the findings of the ld.CIT(A), who following the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he second aspect is there appears to have been no scrutiny of the accounts by the AO - an aspect which is completely unnoticed by the CIT (A) and the ITAT. The third, and in the opinion of this court, important anomaly which we cannot be unmindful is that whereas the entire tax exempt income is Rs. 8,90,000/-, the disallowance ultimately directed works out to nearly 110% of that sum, i.e., Rs. 52,56,197/-. By no stretch of imagination can Section 14A or Rule 8D be interpreted so as to mean that the entire tax exempt income is to be disallowed. The window for disallowance is indicated in Section 14A, and is only to the extent of disallowing expenditure "incurred by the assessee in relation to the tax exempt income". This proportion or portio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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