M/S.SANMAR SPECIALITY vs. THE DEPUTY COMMISSIONER

Tax Case Appeal Nos.601 and 602 of 2016 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 27.07.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMY AND THE HON'BLE MRS.JUSTICE R. HEMALATHA Tax Case Appeal Nos.601 and 602 of 2016 M/s.Sanmar Speciality Chemicals Ltd., No.9, Cathedral Road, Chennai – 600 086.

... Appellant in all appeals Vs.

The Deputy Commissioner of Income Tax, Corporate Circle – 6(1), Chennai – 600 034. ... Respondent in all appeals

Tax Case Appeals in Tax Case Appeal Nos.601 and 602 of 2016 filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Chennai "A" Bench, dated 18.12.2015 passed in I.T.A.Nos.1523/Mds/2015 and 1524/Mds/2015 respectively. Page 1/7 http://www.judis.nic.in Tax Case Appeal Nos.601 and 602 of 2016 For Appellant : Mr.R.Venkat Narayanan for M/s.Subbaraya Aiyar Padmanabhan in all appeals For Respondent : Mr.J.Narayanaswamy

Senior Standing Counsel in all appeals C O M M O N J U D G M E N T (Delivered by M.DURAISWAMY, J.) T.C.A.No.601 of 2016 arises against the order passed in I.T.A.No.1523/Mds/2015 in respect of the Assessment Year 2009-10 on the file of the Income Tax Appellate Tribunal, Madras “A” Bench. T.C.A.No.602 of 2016 arises against the order passed in I.T.A.No.1524/Mds/2015 in respect of the Assessment Year 2011-12 on the file of the Income Tax Appellate Tribunal, Madras “A” Bench. Challenging the order passed by the Tribunal, the assessee has filed the above appeals. 2.For the Assessment Years 2009-10 and 2011-12, the assessee filed the return of income admitting the return loss. The return was processed under Section 143(1) of the Income Tax Act and the case was Page 2/7 http://www.judis.nic.in Tax Case Appeal Nos.601 and 602 of 2016 selected for scrutiny and notice under Section 143(2) was issued and subsequently, the notice under Section 142(1) was also issued. While completing the assessment, the Assessing Officer disallowed the provision for gratuity claimed by the assessee under Section 40A(7)(b) of the Income Tax Act. According to the Assessing Officer, the gratuity payment is covered under Section 43B(b) of the Act as per which the payment made during the year is eligible and the provisions made towards the items mentioned in the section are not allowable deductions. The Assessing Officer negatived the claim of the assessee since it has not made the actual payment and disallowed the provision made towards gratuity and added the same to the total income. 3.Aggrieved by the order passed by the Assessing Officer, the assessee preferred appeals before the Commissioner of Income Tax (Appeals) and the Appellate Authority allowed the appeals. Challenging the order of the Commissioner of Income Tax (Appeals), the Revenue filed an appeal before the Income Tax Appellate Tribunal and the Tribunal, by the impugned orders, remitted the matter back to the Assessing Officer to decide the matter afresh. Page 3/7 http://www.judis.nic.in Tax Case Appeal Nos.601 and 602 of 2016 4.Aggrieved over the order passed by the Income Tax Appellate Tribunal, the assessee has filed the above appeals. 5.The above appeals were admitted on the following substantial questions of law : T.C.A.No.601 of 2016 : “1.Whether on the facts and in the circumstances of the case and in law the Tribunal was right in holding that the provision of Rs.27,62,021/- made by the assessee towards the approved gratuity fund with LIC of India and approved by the Commissioner of Income Tax is not an allowable deduction under Section 40(A)(7)(b) of the Act? 2.Whether on the facts and in the circumstances of the case and in law the Tribunal was right in holding that notwithstanding the allowability of provision made for gratuity under Section 40A(7), the actual payment of the amount to the Trust has to be effected before the same can be allowed ? 3.Whether on the facts and in the circumstances of the case and in law the Tribunal was right in holding that the provisions of Section 43B(b) overrides the provisions of Sec.40A(7)(b) of the Act?” Page 4/7 http://www.judis.nic.in Tax Case Appeal Nos.601 and 602 of 2016 T.C.A.No.602 of 2016 : “1.Whether on the facts and in the circumstances of the case and in law the Tribunal was right in holding that the provision of Rs.55,07,763/- made by the assessee towards the approved gratuity fund with LIC of India and approved by the Commissioner of Income Tax is not an allowable deduction under Section 40(A)(7)(b) of the Act? 2.Whether on the facts and in the circumstances of the case and in law the Tribunal was right in holding that notwithstanding the allowability of provision made for gratuity under Section 40A(7), the actual payment of the amount to the Trust has to be effected before the same can be allowed ? 3.Whether on the facts and in the circumstances of the case and in law the Tribunal was right in holding that the provisions of Section 43B(b) overrides the provisions of Sec.40A(7)(b) of the Act?” 6.When the appeals are taken up for hearing, Mr.R.Venkat Narayanan for M/s.Subbaraya Aiyar Padmanabhan, learned counsel for the appellant, submitted that the authority had already passed an order Page 5/7 http://www.judis.nic.in Tax Case Appeal Nos.601 and 602 of 2016 dated 31.03.2017 in favour of the appellant/assessee, and hence, the above appeals have become infructuous. 7.In view of the submission made by the learned counsel for the appellant, the above Tax Case Appeals are dismissed as infructuous. No costs. [M.D., J.] [R.H., J.] 27.07.2021

Index : Yes/No

Internet : Yes

mkn To 1. Income Tax Appellate Tribunal, Chennai "A" Bench 2.The Deputy Commissioner of Income Tax, Corporate Circle – 6(1), Chennai – 600 034. Page 6/7 http://www.judis.nic.in Tax Case Appeal Nos.601 and 602 of 2016 M. DURAISWAMY, J. and R. HEMALATHA, J. mkn T.C.A. Nos.601 and 602 of 2016

27.07.2021 Page 7/7 http://www.judis.nic.in