DCIT, CIRCLE-1(1), KOLKATA, KOLKATA vs. M/S BIECCO LAWRIE LIMITED, KOLKATA

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ITA 2008/KOL/2016Status: DisposedITAT Kolkata04 April 2018AY 2005-062 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order, noting that the AO himself recorded the payment made by the assessee. The CIT(A) had relied on Supreme Court and Tribunal decisions regarding deductions for payments to gratuity funds.

What were the facts?

The Assessing Officer disallowed the assessee's claim for deduction of gratuity premium paid to LIC, stating the fund was not approved. The assessee contended that the payment was indeed made. The CIT(A) deleted the addition.

What were the issues?

Whether the payment made towards a gratuity fund is deductible even if the fund is not explicitly approved under the Act, and if the fact of payment is established.

Which sections of the Income-tax Act were involved?

Section 37,Section 142(1)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “D” BENCH: KOLKATA

Hearing: 20.02.2018Pronounced: 04.04.2018

Per Shri A.T.Varkey, JM

1.

1. The appeal filed by the revenue is against the order of Ld. CIT(A)-18, Kolkata dated 24.08.2016 for AY 2005-06.

2.

The sole ground raised

by the Revenue is against the order of the Ld. CIT(A) against deletion of addition of Rs.30,60,796/-.

3. Briefly stated facts are that the AO noted that for previous AY i.e. AY 2004-05, the assessee’s claim of deduction in respect of its contribution towards LIC for group gratuity was disallowed, so in notice u/s. 142(1) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) to assessee, it was asked why the same view should not be taken against the assessee since the Gratuity Fund was not approved for the purpose of getting benefit under the Act. For which the assessee replied that it has actually made the payment and therefore, it should be allowed. However, the AO disallowed it. On appeal, the Ld. CIT(A) deleted it. Aggrieved, Revenue is before us.

Biecco Lawrie Limited, AY- 2005-06

4.

We have heard rival submissions and gone through the order of Ld. CIT(A). We note that the AO himself records that “from the Note No. 12, Schedule 22 and from the computation of total income enclosed with the return, it is found that the assessee had paid gratuity premium amounting to Rs.30,60,796/- under Group Gratuity claimed by it.” And to the notice u/s. 142(1) of the Act as discussed above, the assessee has replied to AO that it has indeed made the payment to Gratuity Fund of LIC. So, the question of payment made to Gratuity Fund cannot be contested in view of the aforesaid facts as recorded by AO. On appeal, the Ld. CIT(A) taking note that assessee has made payment to Gratuity Fund of LIC allowed the appeal of assessee relying on Hon’ble Supreme Court’s decision in the case of Metal Box Co. India Ltd. Vs. Workmen 73 ITR 53 wherein it was held that amount paid towards an approved Gratuity Fund can be deducted u/s. 37 of the Act and the Ld. CIT(A) has relied on three decision of Coordinate bench of this Tribunal, so we do not find any infirmity in the order of Ld. CIT(A) and the same is hereby upheld. Appeal of revenue is dismissed.

5.

In the result, appeal of revenue is dismissed. Order is pronounced in the open court on 04.04.2018 Sd/- Sd/- (M. Balaganesh) (Aby. T. Varkey) Accountant Member Judicial Member Dated : 4th April, 2018 Jd.(Sr.P.S.) Copy of the order forwarded to:

1.

Appellant – DCIT, Circle-1(1), Kolkata 2 Respondent – M/s. Beicco Lawrie Limited, 6, Mayurbhanj Road, Kolkata-700 023. 3. The CIT(A) Kolkata.

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