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“approved gratuity fund”

Chapter I - PreliminarySection 2 - DefinitionsSection 2(5) / Part C of Fourth Schedule / ITR Part A-OI118 judgments

The decision most relied on for approved gratuity fund is Union of India v. Exide Industries (425 ITR 1), cited in 146 judgments on BharatTax.

Leading authorities on approved gratuity fund

Union of India v. Exide Industries
425 ITR 1 · 2020 · Supreme Court
146
citing judgments

The provision for leave encashment is allowable as a deduction only on an actual payment basis under Section 43B(f) of the Income Tax Act, 1961. The Supreme Court upheld the constitutional validity of Section 43B(f).

Commissioner of Income-tax v. Society for Promotion of Education, Adventure Sport & Conservation of Environment
382 ITR 6 · 2016 · Supreme Court
26
citing judgments

If an assessee has applied for approval of a fund or exemption within a reasonable time, the exemption should not be denied due to delays in processing by the tax authorities. The taxing authorities erred in holding that gross receipts are taxable without allowing expenditure when exemption is denied.

Agrawal Flooring Stone Co. v. CIT
216 ITR 757 · 1995 · High Court
17
citing judgments

An amount paid by an assessee to its employees' approved gratuity fund is not deductible if it is not paid wholly and exclusively for the purposes of the business. A payment made by way of contribution to a gratuity fund, while it may be for the benefit of the employees, must also be demonstrably for the purpose of the business itself to qualify for deduction.

CIT v. Bitoni Lamps Ltd.
144 Taxmann 33 · Reported
17
citing judgments

Disallowance under Section 40A(7) of the Income Tax Act cannot be made solely on the ground that the gratuity fund is not approved, especially when the payment is made to an LIC group gratuity fund and approval is pending.

327 (SC) Pr.CIT vs. Rajasthan State Seed Corporation 386 ITR 267 (Raj) and CIT v. Continental Commercial Co. Ltd.
192 ITR 66 · 1991 · High Court
10
citing judgments

For a provision for gratuity to be allowed as a deduction, the assessee must create an approved gratuity fund for the exclusive benefit of its employees under an irrevocable trust, and the application for approval must be made to the Commissioner.

Judgments citing approved gratuity fund

Deputy Commissioner of Income Tax, Circle, Patiala vs. Punjab State Power Corporation Limited, Patiala

In the result, both the appeals filed by the Revenue are partly allowed

ITA 645/CHANDI/2023[2013-14]Status: DisposedITAT Chandigarh28 Nov 2024AY 2013-14

Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)

For Appellant: Shri Rajiv Saldi, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR
Section 36(1)(va)Section 43B

existing provisions of the 1961 Act, the contribution made by an employer towards a recognised provident fund, an approved superannuation fund or an approved gratuity fund is allowable as a deduction from business income under clauses (iv) and (v) respectively, of section 36(1), subject to certain limits. However, section

ACIT, Circle-34, Kolkata vs. Syama Prasad Mookerjee Port, Kolkata

In the result, all the grounds filed by the Revenue in all the four years are hereby dismissed

ITA 999/KOL/2024[2018-19]Status: DisposedITAT Kolkata18 Nov 2024AY 2018-19

Bench: proceeding for adjudicating this matter, it is noticed that the 4 appeals filed by the Department are barred by limitation, comprising of delay ranging from 119 days to 129 days. The application for said condonation of delay are almost identically worded. For the sake of convenience, the application for AY 2018-19 is extracted as under: “1. Order of CIT (A) was received in the office of the PCIT-5, Kolkata on 23.01.2024.

Section 148A

read with Rule 87 of IT Rules, the additions made by the Ld. AO were justified. Secondly, on the issue of contribution to approve gratuity fund which was also for funding the gap between actual contribution and actuarial valuation, the Ld. DR relied on the provision of Section ... judgment, this ground is decided in favour of the assessee and against the Revenue. 3.1 Regarding the issue of alleged excess contribution to approved gratuity fund to part fund the gap in actuarial valuation and actual contribution, the case of Eastern Equipment and Sales (supra) comes to the Appellant

ACIT, Circle -34, Kolkata vs. Syama Prasad Mookerjee Port, Kolkata

In the result, all the grounds filed by the Revenue in all the four years are hereby dismissed

ITA 981/KOL/2024[2017-18]Status: DisposedITAT Kolkata18 Nov 2024AY 2017-18

Bench: proceeding for adjudicating this matter, it is noticed that the 4 appeals filed by the Department are barred by limitation, comprising of delay ranging from 119 days to 129 days. The application for said condonation of delay are almost identically worded. For the sake of convenience, the application for AY 2018-19 is extracted as under: “1. Order of CIT (A) was received in the office of the PCIT-5, Kolkata on 23.01.2024.

Section 148A

read with Rule 87 of IT Rules, the additions made by the Ld. AO were justified. Secondly, on the issue of contribution to approve gratuity fund which was also for funding the gap between actual contribution and actuarial valuation, the Ld. DR relied on the provision of Section ... judgment, this ground is decided in favour of the assessee and against the Revenue. 3.1 Regarding the issue of alleged excess contribution to approved gratuity fund to part fund the gap in actuarial valuation and actual contribution, the case of Eastern Equipment and Sales (supra) comes to the Appellant

ACIT, Circle-34, Kolkata vs. Syama Prasad Mookerjee Port, Kolkata

In the result, all the grounds filed by the Revenue in all the four years are hereby dismissed

ITA 1001/KOL/2024[2021-22]Status: DisposedITAT Kolkata18 Nov 2024AY 2021-22

Bench: proceeding for adjudicating this matter, it is noticed that the 4 appeals filed by the Department are barred by limitation, comprising of delay ranging from 119 days to 129 days. The application for said condonation of delay are almost identically worded. For the sake of convenience, the application for AY 2018-19 is extracted as under: “1. Order of CIT (A) was received in the office of the PCIT-5, Kolkata on 23.01.2024.

Section 148A

read with Rule 87 of IT Rules, the additions made by the Ld. AO were justified. Secondly, on the issue of contribution to approve gratuity fund which was also for funding the gap between actual contribution and actuarial valuation, the Ld. DR relied on the provision of Section ... judgment, this ground is decided in favour of the assessee and against the Revenue. 3.1 Regarding the issue of alleged excess contribution to approved gratuity fund to part fund the gap in actuarial valuation and actual contribution, the case of Eastern Equipment and Sales (supra) comes to the Appellant

ACIT, Circle -34, Kolkata vs. Syama Prasad Mookerjee Port, Kolkata

In the result, all the grounds filed by the Revenue in all the four years are hereby dismissed

ITA 1000/KOL/2024[2020-21]Status: DisposedITAT Kolkata18 Nov 2024AY 2020-21

Bench: proceeding for adjudicating this matter, it is noticed that the 4 appeals filed by the Department are barred by limitation, comprising of delay ranging from 119 days to 129 days. The application for said condonation of delay are almost identically worded. For the sake of convenience, the application for AY 2018-19 is extracted as under: “1. Order of CIT (A) was received in the office of the PCIT-5, Kolkata on 23.01.2024.

Section 148A

read with Rule 87 of IT Rules, the additions made by the Ld. AO were justified. Secondly, on the issue of contribution to approve gratuity fund which was also for funding the gap between actual contribution and actuarial valuation, the Ld. DR relied on the provision of Section ... judgment, this ground is decided in favour of the assessee and against the Revenue. 3.1 Regarding the issue of alleged excess contribution to approved gratuity fund to part fund the gap in actuarial valuation and actual contribution, the case of Eastern Equipment and Sales (supra) comes to the Appellant

JCIT (OSD), CC-4(4), Mumbai vs. M/S. Shri Renukamata Multi-State Cooperative Urban Credit Society Ltd., Ahamednagar

ITA 2078/MUM/2023[2018-2019]Status: DisposedITAT Mumbai30 Jul 2024AY 2018-2019

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: Shri Dharmendra KansaraFor Respondent: Ms. Mahita Nair
Section 142Section 153DSection 250Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL

Shri Renukamata Multi-State Co-Operative Urban Society Ltd, Mumbai vs. Assistant Commissioner of Income Tax, Central Circle 4(4), Mumbai

ITA 1727/MUM/2023[2018-2019]Status: DisposedITAT Mumbai30 Jul 2024AY 2018-2019

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: Shri Dharmendra KansaraFor Respondent: Ms. Mahita Nair
Section 142Section 153DSection 250Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL

M/S Renukamata Multi State Co-Op. Urban Creditn Soc. Ltd., Mumbai vs. The Asstt. CIT, CC-4(4), Mumbai

ITA 1726/MUM/2023[2017-18]Status: DisposedITAT Mumbai30 Jul 2024AY 2017-18

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: Shri Dharmendra KansaraFor Respondent: Ms. Mahita Nair
Section 142Section 153DSection 250Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL

M/S Renukamata Multi State Co-Op. Urban Creditn Soc. Ltd., Mumbai vs. The Asstt. CIT, CC-4(4), Mumbai

ITA 1725/MUM/2023[2016-17]Status: DisposedITAT Mumbai30 Jul 2024AY 2016-17

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: Shri Dharmendra KansaraFor Respondent: Ms. Mahita Nair
Section 142Section 153DSection 250Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL

Svc Co-Operative Bank Ltd., Mumbai vs. ACIT, Cir.1(3)(1), Mumbai

Appeal is allowed for statistical purposes in above terms

ITA 2475/MUM/2024[2021-22]Status: DisposedITAT Mumbai26 Jul 2024AY 2021-22

Bench: Shri Satbeer Singh Godara & Shri Omkareshwar Chidara

For Appellant: Shri Rajiv Waglay, AdvocateFor Respondent: Shri Dr. Kishor Dhule, CIT-DR
Section 143(3)Section 36(1)(v)

confirming the above disallowance of staff gratuity on the ground that the said payment was not made to any approved gratuity fund as contemplated u/s.36(1)(v) of Income Tax Act, 1961. 5. confirming the above disallowance of staff gratuity on the ground that payment made

Haldiram Foods International Private Limited, Mumbai vs. Deputy Commissioner of Income Tax, Bengluru

In the result, the appeal is allowed for statistical purpose

ITA 1350/MUM/2024[2022-2023]Status: DisposedITAT Mumbai27 Jun 2024AY 2022-2023

Bench: SHRI PAVAN KUMAR GADALE (Judicial Member), SHRI RATNESH NANDAN SAHAY (Accountant Member)

For Appellant: Shri Yogesh Thar, A.RFor Respondent: Shri P. D. Chougule, (Addl. CIT), SR. D.R
Section 115BSection 143(1)Section 154Section 250Section 43B

ground on merits and thereby upholding the disallowance made by ld. AO amounting to Rs. 84,89,878/- towards payment made to an approved gratuity fund. 2.2. The Id. CIT(A) failed to appreciate and ought to have held / considered that: 2.2.1. As per section 43B of the Act, contributions ... towards the approved Gratuity fund which was disallowed during any preceding previous year due to nonpayment thereof, then same is allowed in the year in which such contribution is actually paid. 2.2.2. Without prejudice to the above, mere omission in disclosure made by the tax auditor in tax audit report

DCIT 2(2)(2), Mumbai vs. The Hongkong and Shanghai Banking Corp Ltd, Mumbai

In the result, assessee’s appeals are allowed wherein

ITA 4786/MUM/2016[2005-06]Status: DisposedITAT Mumbai30 Apr 2024AY 2005-06

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GAGAN GOYAL (Accountant Member)

Section 10(15)(iv)Section 10(34)Section 143(3)Section 14A

account of overfunding of Employees Gratuity Fund (Income Tax Approved Fund) 95. The facts are that the Assessee makes a contribution to the approved gratuity fund. The Assessee has contributed to the employee's gratuity fund in excess of the amount required to meet the accrued liability for the current

The Hong Kong & Shanghai Banking Corporation Ltd., Mumbai vs. Jt. Director of Income Tax (International Taxation) - Range -3, Mumbai

In the result, assessee’s appeals are allowed wherein

ITA 4765/MUM/2016[2005-06]Status: DisposedITAT Mumbai30 Apr 2024AY 2005-06

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GAGAN GOYAL (Accountant Member)

Section 10(15)(iv)Section 10(34)Section 143(3)Section 14A

account of overfunding of Employees Gratuity Fund (Income Tax Approved Fund) 95. The facts are that the Assessee makes a contribution to the approved gratuity fund. The Assessee has contributed to the employee's gratuity fund in excess of the amount required to meet the accrued liability for the current

DDIT (It) 3(1), Mumbai vs. Hongkong & Sanghai Banking Corporation Ltd, Mumbai

In the result, assessee’s appeals are allowed wherein

ITA 7824/MUM/2010[2004-05]Status: DisposedITAT Mumbai30 Apr 2024AY 2004-05

Bench: IN THE INCOME TAX APPELLATE TRIBUNAL, ‘H’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA (Judicial Member), SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA No.7336/Mum/2010 (Assessment Year :2004-05) & ITA No.4765/Mum/2016 (Assessment Year :2005-06) The Hongkong & Shanghai Banking Corporation Ltd. Srnior Vice President Tax, India Area Management 5th Floor, Hongkong Bank Building, 52/60, MG Road Fort, Mumbai – 400 001 (Appellant) Vs. The Joint Director of Income Tax (International Taxation)-3, Mumbai 1st Flo

Section 10(15)(iv)Section 10(34)Section 143(3)Section 14A

account of overfunding of Employees Gratuity Fund (Income Tax Approved Fund) 95. The facts are that the Assessee makes a contribution to the approved gratuity fund. The Assessee has contributed to the employee's gratuity fund in excess of the amount required to meet the accrued liability for the current

The Hongkong & Shanghai Banking Corporation Ltd, Mumbai vs. DDIT (It) 3(1), Mumbai

In the result, assessee’s appeals are allowed wherein

ITA 7336/MUM/2010[2004-05]Status: DisposedITAT Mumbai30 Apr 2024AY 2004-05

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GAGAN GOYAL, ACCOUNTANT MEMBER & The Hongkong & Shanghai Banking Corporation Ltd. Srnior (Vice President)

Section 10(15)(iv)Section 10(34)Section 143(3)Section 14A

account of overfunding of Employees Gratuity Fund (Income Tax Approved Fund) 95. The facts are that the Assessee makes a contribution to the approved gratuity fund. The Assessee has contributed to the employee's gratuity fund in excess of the amount required to meet the accrued liability for the current

Fleetguard Filters Private Limited, Pune vs. Dy Commissioner of Income Tax Circle 1(1), Pune

In the result, appeal of the Assessee dismissed

ITA 921/PUN/2023[2016-2017]Status: DisposedITAT Pune24 Apr 2024AY 2016-2017

Bench: Shri S.S.Godara & Dr. Dipak P. Ripoteआयकर अपील सं. / Ita No.921/Pun/2023 िनधा"रण वष" / Assessment Year : 2016-17 Fleetguard Filters Private The Dy.Commissioner Of Limited, V Income Tax, Circle-1(1), 136, Park Marina Road, S Pune. Baner, Pune – 411045. Pan: Aaace3125C Appellant/ Assessee Respondent /Revenue Assessee By Shri Sharad A Shah – Ar Revenue By Shri Sandeep P. Sathe – Dr Date Of Hearing 12/04/2024 Date Of Pronouncement 24/04/2024 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Is An Appeal Filed By The Assessee Against The Order Of Ld.Commissioner Of Income Tax(Appeal)[Nfac], Delhi Under Section 250 Of The Income Tax Act, 1961, For Ay 2016-17 Dated 23/06/2023,Emanating From The Order Under Section 143(3) Of The Act, Dated 19.12.2018.The Assessee Has Raised The Following Grounds Of Appeal : “A. The Learned Commissioner Of Income Tax (Appeals) Made A Mistake In Disallowing The Payment Made For Gratuity To Its Employees Amounting To Rs 28.28,922/-. Fleetguard Filters Private Limited [A]

Section 143(3)Section 250Section 40ASection 40A(7)

relation to any provision made by the assessee for the purpose of payment of a sum by way of any contribution towards an approved gratuity fund, or for the purpose of payment of any gratuity, that has become payable during the previous year. Explanation.—For the removal of doubts ... computing the income of the assessee for any assessment year, any sum paid out of such provision by way of contribution towards an approved gratuity fund or by way of gratuity to any employee shall not be allowed as a deduction in computing the income of the assessee

Tirupur Thozhil Pathukappu Kulu, Tiruppur vs. ACIT, Exemptions, Coimbatore

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 1086/CHNY/2023[2020-21]Status: DisposedITAT Chennai10 Jan 2024AY 2020-21

Bench: Shri Mahavir Singh

For Appellant: Shri R. Viswanathan, CAFor Respondent: Shri G.Suresh, JCIT
Section 10(25)Section 12ASection 143(3)Section 164(1)(iv)Section 167A

Board have been advised that cases where income received by the trustees on behalf of a recognised provident fund, approved superannuation fund and approved gratuity fund is governed by section 10(25) of the Income-tax Act, the question of their being charged to tax does not arise

Twinings (P) Ltd., Kolkata vs. D.C.I.T., Circle-4(2), Kolkata

In the result, appeal of the assessee is allowed

ITA 391/KOL/2019[2014-15]Status: HeardITAT Kolkata08 Jan 2024AY 2014-15

Bench: Shri Sanjay Garg & Shri Girish Agrawalassessment Year: 2014-15

For Appellant: Shri Siddharth Agarwal, AdvocateFor Respondent: Shri B. K. Singh, JCIT, Sr. DR
Section 143(3)Section 36(1)(v)Section 37(1)

order granting approval to Twinings Pvt. Ltd. employees’ gratuity fund constituted under the Trust Deed dated 08.12.2022 as an approved gratuity fund which shall take effect from 03.01.2023 was placed on record. The said order is passed by Ld. Pr. CIT, Kolkata which is dated 04.10.2023. Ld. Counsel also submitted ... delve into the provisions contained in the Act. The relevant provisions and rules are extracted below: (i) Sec. 2(5) which defines approved gratuity fund. The said section is reproduced as under: “(5) “approved gratuity fund” means a gratuity fund has been and continues to be approved by the [Principal

Atc Logistical Solutions Private Limited, Delhi vs. Deputy Commissioner of Income Tax Circle-1, Amritsar

In the result, appeal of the assessee ITA No

ITA 241/ASR/2023[2017-18]Status: DisposedITAT Amritsar31 Oct 2023AY 2017-18

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 115JSection 139Section 143(1)Section 143(3)Section 154Section 250Section 36(1)(va)Section 37(1)Section 40ASection 40A(7)

relation to any provision made by the assessee for the purpose of payment of a sum by way of any contribution towards an approved gratuity fund, or for the purpose of payment of any gratuity, that has become payable during the previous year.” The provision for gratuity

ACIT, Cir-1(2)(1), Mumbai vs. M/S. Mseb Holding Company Ltd., Mumbai

In the result, all the appeals filed by the Revenue/Department are dismissed

ITA 2040/MUM/2023[2008-09]Status: DisposedITAT Mumbai30 Oct 2023AY 2008-09

Bench: Shri B.R. Baskaran, Am & Shri N. K. Choudhry, Jm

For Appellant: Shri Ketan Ved, Ld. CAFor Respondent: Respondent/
Section 143(1)Section 148Section 24Section 250Section 271(1)(c)Section 275

fact that the services of some employees had been taken over upon acquisition of a business, but they were not members of an approved gratuity fund unlike other employees of the assessee. Under these circumstances, the tax return was finalized and filled in by a named person