2016 (2) TMI 1309

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..... by the assessee u/s 80IA of the Act in respect of interest income from deposits. 3. Shri R.Vijayaraghavan, ld. Counsel for the assessee submitted that interest was received from deposits. The very same issue came up before this Tribunal in assessee's own case for assessment year 2008-09 and this Tribunal found that interest income is not eligible for deduction u/s 80IA of the Act. 4. We heard Shri Pathlavath Peerya, ld. Departmental Representative also. 5. As rightly submitted by the ld. Counsel for the assessee, this Tribunal in the assessee's own case for assessment year 2008-09 in I.T.A.No. 2104/Mds/2011 dated 27.9.2013 found that the interest income is not eligible for deduction u/s 80IA of the Act. In view of the above, this Tribuna .....

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..... re has to be excluded. According to the ld. Counsel, the expenditure incurred by the assessee for earning the income which does not form part of the eligible profit for deduction u/s 80IA has to be deducted from profits and gains. 12. On the contrary, Shri Pathlavath Peerya, ld. DR submitted that what was excluded is the interest and other income. The assessee has not claimed any expenditure for earning this income and no details of expenditure said to be incurred by the assessee are also not available on record. Therefore, the question of exclusion of expenditure does not arise for consideration. 13. We have considered the rival submissions on either side and also perused the material available on record. What was not excluded in the eli .....

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..... s executed only on 2.5.2015. Therefore, as on the date of payment, the trust deed itself is not in existence, therefore, the assessee could not have paid the money to LIC. In the case before the Apex Court in Textool Co. Ltd(supra), the the gratuity fund was established and the only issue was that it was not approved by the competent authority. The annual premium was paid to LIC as initial contribution. In those circumstances, the Apex Court found that the real intention behind sec. 36(1)(v) is that the employer should not have any control over the funds of the irrevocable trust created exclusively for the benefit of the employees. Therefore, creation of the trust is a mandatory pre-condition for payment of contribution by the assessee .....

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