TMI Blog2021 (9) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... J. This appeal by the revenue is directed against the order dated 21.08.2015 passed by the Income Tax Appellate Tribunal [hereinafter referred to as the Tribunal], 'B' Bench, Chennai in I.T.A.No.862/Mds/2015 for the assessment year 2010-2011. 2.The appeal was admitted on 20.07.2016 to decide the following substantial questions of law: 1.Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the contribution made towards superannuation fund has to be treated as business expenditure allowable under Section 37 of the Income Tax Act? 2.Is not the finding of the Tribunal bad by directing the AO to allow expenditure under Section 37 when the assessee failed to obtain necessary approval from the competent authority viz., Principal Commissioner of Income Tax for the year under consideration and the deduction falls squarely within the ambit of Section 36(1)(iv) r/w. Section 40A(9)? 3.We have heard Mr.T.Ravikumar, learned Senior Standing Counsel appearing for the appellant/revenue and M/s.N.V.Lakshmi, learned counsel appearing for the respondent/assessee. 4.It is not disputed befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 2(38) of the Act and section 36 of the Act. 5.Section 2(38) of the Act defines 'recognised provident fund' as meaning a provident fund which has been and continues to be recognised by the Chief Commissioner or Commissioner in accordance with the rules contained in Part A of the Fourth Schedule, and includes a provident fund established under a scheme framed under the Employees' Provident Funds Act, 1952 (Act 19 of 1952). Section 36(1)(iv) permits the deduction or contribution made only to a recognised provident fund or an approved superannuation fund. Under section 2(38) of the Act, it is only a scheme framed under the Employees' Provident Funds Act which is deemed to be an approved provident fund for the purpose of the Income-tax Act even though such a fund has not received the express approval of the Commissioner of Income-tax. 6.The assessee herein did not claim that fund to which contribution has been made was one set up under the scheme of the Employees' Provident Funds Act. On the other hand, it sought exemption from the provisions of that Act for the scheme framed by it on the ground that the benefits available to the employees un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue. 10.The questions referred to us at the instance of the assessee are : 1.Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that a sum of ₹ 82,500 paid towards unexpired portion of the route permit was not a revenue expenditure ? 2.Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the payment of ₹ 3,50,000 to the Chief Minister's Drought Relief Fund was not an allowable deduction ? The first of these questions is covered against the assessee by a judgment of this Court in the case of Anna Transport Corpn. Ltd. v. CIT[1995] 215 ITR 800 wherein, it was held that the amount paid towards unexpired portion of the route permit is not a revenue expenditure. Following that judgment and for the reasons stated therein, we answer this question against the assessee and in favour of the revenue. The second question referred to us at the instance of the assessee is required to be answered in favour of the assessee in the light of the decision rendered by this Court in the case of CIT v. Cheran Transport Corpn. Ltd. [1996] 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... described in Section 36(1)(iv) and (v) and therefore the same cannot be allowed under section 37 of the Act. To the same effect, reliance was placed on the decision of the High Court of Delhi in the case of Jay Metal Industrial Private Ltd. vs. Commissioner of Income Tax [(2017) 396 ITR 0194 (Delhi)] . After placing reliance on these decisions, the learned senior standing counsel referred to the observations made by the Assessing Officer as well as the Commissioner of Income Tax (Appeals) [hereinafter referred to as CIT(A)] and submitted that the Tribunal ought not to have interfered with the said finding. 8.M/s.N.V.Lakshmi, learned counsel for the respondent submitted that identical questions of law have already been answered in the assessee's own case for the earlier assessment year and subsequent assessment year in favour of the assessee and the revenue cannot pray for a different relief in the present appeal as the substantial questions of law are covered by the earlier decision which has attained finality. Further, the learned counsel submitted that what was argued before this Court was raised before the Tribunal by way of a miscellaneous application in M.P.No.226 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e's case that the funds to which they have remitted money is an approved fund. 11.In contradiction with the cases which were relied on by the revenue where two provisions were pitted against each other, namely, Section 36(1)(iv) and Section 40A(9) of the Act. The question was when deduction was impermissible under Section 36(1)(iv) r/w. Section 40A(9) of the Act, whether the assessee can claim deduction under a general provision, namely, Section 37 of the Act. This question was rightly answered in favour of the revenue and against the assessees in all the four decisions referred above. However, in the instant case, the assessee never claimed any benefit under Section 36 of the Act nor was its claim that the remittance is towards a fund which was approved by the Department. Admittedly, approval was granted on 19.03.2014 with effect from 02.08.2013 by the respondent Department. Therefore, the period in dispute is hardly five assessment years of which for three assessment years, the Court has decided the matter in favour of the assessee and the fourth year is the year under consideration in this appeal. Therefore, the Tribunal took note of the facts and as to under what circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case based on facts. As explained in the case of Textool Co. Ltd. , the intention behind the provision assumes importance. There can be no allegation that the respondent Board had adopted such procedure as a tax avoidance measure rather it was a duty cast upon them based on the direction issued by the Government. 14.The revenue sought to distinguish the decision in the case of Commissioner of Income Tax vs. Kattabomman Transport Corporation Ltd. [(2004) 268 ITR 0507] by contending that the employees therein were under deputation, whereas the employees for whom the respondent/assessee had effected the deposits have been absorbed. On noting the facts in the instant case, we find that the case on hand is a better case on facts than that of Kattabomman Transport Corporation Ltd. as absorption into the respondent/assessee/Board is pursuant to the State Government decision which gives option to the erstwhile employees of the Port Department to become permanent employees of the respondent/assessee/Board subject to the condition that their service conditions which include gratuity remains unaltered. Therefore, the decision in Kattabomman Transport Corporation Ltd. , wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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