TMI Blog2022 (9) TMI 1259X X X X Extracts X X X X X X X X Extracts X X X X ..... der the rules and no ceiling has been fixed with regard to the amount of such contribution. This has not been disputed by the revenue that the amount paid by the respondent/assessee in excess of 27% of the salaries of the employees are neither towards ordinary annual contribution nor towards initial contribution and the payment was necessitated due to short-fall discovered in the course of actuarial valuation of the funds which is in exceptional circumstances and has been made to ensure that the superannuation funds will be able to discharge its obligation to the employees. We are satisfied that the amount which was remitted by the respondent/assessee is neither towards an initial contribution nor towards an ordinary annual contribution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and annual contribution to a pension fund may also be deducted from the income of the employer, would an ad hoc or lump sum interim contribution, in such circumstances, be also eligible for deduction. We have heard Mr. Tilak Mitra, learned standing counsel appearing for the appellant and Mr. J.P. Khaitan, learned senior advocate assisted by Mrs. Nilanjana Banerjee Pal, learned advocate appearing for the respondents. The issue involved in this appeal pertains to the disallowance of a sum of Rs.9,14,70,000/- being contribution to the approved pension fund. The deduction scheme of the respondent/assessee was rejected by the Assessing Officer and the ground that the allowability of deduction towards contribution to superannuati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed the assessee s appeal. We have carefully considered the submissions of either side and perused the materials on record. Section 36 of the Act deals with other deductions. Sub-Section (1) of Section 36 states that deduction provided for in the clause enumerated thereunder shall be allowed in respect of matters dealt with therein in computing the income referred to Section 28. Claus-(iv) is under Section 36(1) would be relevant for our case which is quoted hereinbelow: Other deductions. 36. (1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28- (i) . . . . . . . . . (ii) . . . . . . . . . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyer s contribution, if any, to any provident fund (whether recognised or not) in respect of the same employee for that year. Initial contributions. 88. Subject to any condition which the Board may think fit to specify under clause (iv) of sub-Section (1) of Section 36, the amount to be allowed as a deduction on account of an initial contribution which an employer may make in respect of the past services of an employee admitted to the benefits of a fund shall not exceed twenty-five per cent of the employee s salary for each year [up to the employee s salary for each year] of his past service with the employer as reduced by the employer s contribution, if any, to any provident fund (whether recognised or not) in respect of that employ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Tribunal bearing the above principle in mind and also taking note of the decision of the co-ordinate bench of the Tribunal in Glaxo Smithkline Pharmaceuticals (supra) allowed the assessee s appeal. The revenue had challenged the order passed by the learned tribunal in the case of Glaxo Smithkline Pharmaceuticals before the High Court of Judicature at Bombay in Income Tax Appeal No.2232 of 2011 which was dismissed by judgment dated 6th March, 2013. However, we are conscious of the fact that the Hon ble Division Bench while dismissing the appeal had made an observation that even if the expenditure as claimed is not allowable under Section 36(1)(iv) of the Act, the same is allowable under Section 37 of the Act. However, on this as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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