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Income Tax Appellate Tribunal, “A” BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
These appeals of the Revenue are directed against the respective orders passed by the Commissioner of Income Tax (Appeals)-III, Chennai, for the assessment years 2005-06 and 2008-
Since common issue arises for consideration in both these same by this common order.
The only issue arises for consideration is with regard to disallowance of provision made for payment of Gratuity.
Sh. P. Radhakrishnan, the Ld. Departmental Representative, submitted that the assessee made provision for payment of Gratuity. Since the payment was not made during the year under consideration, the Assessing Officer disallowed the claim of the assessee. However, the CIT(Appeals) found that the approved Gratuity Fund is covered under Section 40A(7)(b) of the Income-tax Act, 1961 (in short 'the Act'). The CIT(Appeals), by following his own decision in M/s Tyco Sanmar Limited in dated 1.12.2013, allowed the claim of the assessee. According to the Ld. D.R., in the absence of details of the payment, the same cannot be allowed under Section 43B of the Act.
On the contrary, Sh. Saroj Kumar Parida, the Ld.counsel for the assessee, submitted that under Section 40A(7)(b) of the Act, a provision made for payment of Gratuity, an approved fund is an allowable expenditure, while computing taxable income. A similar view was taken by this Tribunal in dated
3 & 2444/Mds/14 12.12.2014. This Tribunal has also followed this order in I.T.A. No.611/Mds/2012 dated 12.6.2015. Therefore, the CIT(Appeals) has rightly allowed the claim of the assessee.
We have considered the rival submissions on either side and perused the relevant material on record. It is not in dispute that the Gratuity Fund is an approved one. The assessee has also made a provision for payment. Since the provision was made for payment of Gratuity fund, which is an approved one, this Tribunal is of the considered opinion that Section 40A(7)(b) of the Act would come into operation. Therefore, the CIT(Appeals) has rightly allowed the claim of the assessee. This Tribunal do not find any infirmity in the order of the lower authority and accordingly, the same is confirmed.
In the result, both the appeals of the Revenue are dismissed.
Order pronounced on 3rd July, 2015 at Chennai.