“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

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

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

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

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

Modern Veer Rays Security Force (India) Private Limited, Mumbai vs. Assistant Director of Incometax, CPC, Bangalore

In the result, both the appeals of the assessee are partly allowed for statistical purposes

ITA 1167/MUM/2023[2019-20]Status: DisposedITAT Mumbai23 Aug 2023AY 2019-20

Section 143(1)Section 43B

Section 40A(7)(b) states that a provision made by the assessee by way of contribution towards an approved gratuity fund or for the purpose of payment of any gratuity that has become payable during the previous year, however, would not be hit by section 40A(7)(a). The provision

M/S Modern Veer Rays Security Force (India) Private Limited, Mumbai vs. Deputy Commissioner of Income Tax Centralized Processing Centre, Bangalore

In the result, both the appeals of the assessee are partly allowed for statistical purposes

ITA 1166/MUM/2023[2018-2019]Status: DisposedITAT Mumbai23 Aug 2023AY 2018-2019

Section 143(1)Section 43B

Tourism Finance Corporation of India Ltd., New Delhi vs. Addl. CIT, Special Range- 9, New Delhi

In the result, the appeal of the assessee is allowed

ITA 2969/DEL/2018[2014-15]Status: DisposedITAT Delhi17 Aug 2023AY 2014-15

Bench: Shri Chandra Mohan Garg & Shri Pradip Kumar Kediaassessment Year: 2014-15 Tourism Finance Corporation Of India Addl. Cit, Special Range-9, New Delhi Ltd., 110002 4Th Floor, Tower-1, Nbcc Plaza, Sec-5, Vs. Pushp Vihar, Saket, New Delhi 110017 Pan Aaact 0706 S (Appellant) (Respondent) For Assessee: Shri Sanjay Aggarwal, Ca For Revenue : Shri N K Bansal, Sr. Dr

For Appellant: Shri Sanjay Aggarwal, CAFor Respondent: Shri N K Bansal, Sr. DR

Section 40A(7)(b)Section 584

revised statement filed on 04-07-2016 wherein the assessee made a wrong disallowance for increased provision for Gratuity liability towards an approved gratuity fund by the Commissioner of Income Tax and therefore covered u/s 40A(7)(b) of the Act. 3)That on the facts and in the circumstances

Asst CIT Cir 2(2)(1), Mumbai vs. State Bank of India, Mumbai

In the result, the appeal by the Revenue is partly allowed for statistical purposes

ITA 4564/MUM/2016[2009-10]Status: DisposedITAT Mumbai06 Jun 2023AY 2009-10

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

For Appellant: S/Shri P.J. Pardiwala a/w Ninad PatadeFor Respondent: Ms. Surabhi Sharma

Section 142(1)Section 143(2)Section 143(3)Section 14ASection 250Section 36(1)Section 36(1)(vii)Section 36(1)(viia)

claimed of any sum paid by an assessee as an employer towards a recognised provident fund or an approved superannuation fund or an approved gratuity fund. The amount of Rs.3,724 crores are clearly not a contribution towards any recognised provident fund or approved superannuation fund or approved gratuity fund ... specifically deal with contribution to a recognized provident fund or an approved superannuation fund or an approved gratuity fund. The said sections do not deal with providing for a liability vis-à-vis pension or any other retirement benefits. Thus, the aforesaid provision for pension made on the basis

State Bank of India, Mumbai vs. Addl CIT RG 2(2), Mumbai

In the result, the appeal by the Revenue is partly allowed for statistical purposes

ITA 3645/MUM/2016[2009-10]Status: DisposedITAT Mumbai06 Jun 2023AY 2009-10

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

For Appellant: S/Shri P.J. Pardiwala a/w Ninad PatadeFor Respondent: Ms. Surabhi Sharma

Section 142(1)Section 143(2)Section 143(3)Section 14ASection 250Section 36(1)Section 36(1)(vii)Section 36(1)(viia)

Vajra Rubber Products Private Limited, Thrissur vs. ACIT Circle 1(1), Thrissur

In the result, the appeal by the assessee is allowed

ITA 660/COCH/2022[2013-2014]Status: DisposedITAT Cochin08 Mar 2023AY 2013-2014

Bench: Shri George George K. & Ms. Padmavathy S.

For Appellant: Smt. Preetha Shenoy, CAFor Respondent: Smt. J M Jamuna Devi, Sr. AR

Section 250Section 40A(7)

accept the submissions of the assessee by holding that unless the payment is made to approved gratuity fund, deduction is not available and that section 40A(7) specifically prohibits the provision in respect of payment of gratuity to employees unless by way of contribution to an approved gratuity fund

Assistant Commissioner of Income Tax, Circle-IV, Pathankot vs. The Gurdaspur Central Co. Opbank Ltd, Gurdaspur

In the result, the ground no

ITA 542/ASR/2017[2013-14]Status: DisposedITAT Amritsar31 Jan 2023AY 2013-14

Bench: Dr. M. L. Meenaandsh. Anikesh Banerjee

Section 143(3)Section 250(6)Section 40Section 43D

admissible per the Act when as per the act it is admissible if paid by employer by way of contribution toward approved Gratuity fund. Assessee vide notice dated 2-2-2015 and 10-6-2015 was required toexplain with supporting evidence. Assessee vide written submissions dated 25-6-2015 made ... assessee is eligible in deduction u/s 43B(f) and the same amount is admissible paid by the employer by way of contribution funds approved gratuity funds. 12.1. Challenging the addition, the assessee filed an appeal before the ld. CIT(A) and challenged the order

ITO - 31(2)(1), Mumbai vs. Johnson & Johnson Ltd. Gratuity, Mumbai

In the result, appeal of the ld

ITA 481/MUM/2021[2010-11]Status: DisposedITAT Mumbai19 Dec 2022AY 2010-11

Bench: Shri Prashant Maharishi, Am & Shri Rahul Chaudhary, Jm Johnson & Johnson Ltd. Gratuity Ito-3(2)(1) 501, Areana Space, Off Jvlr, Room No – 615, 6Th Floor, Behind Majas Bus Depot, Kautilya Bhavan, Bkc, Bandra Vs. Jogeshwar East, East, Mumbai-400 051 Mumbai-400 060 (Respondent) (Appellant) Pan No. Aaaaj1600Q Assessee By : Shri M P Lohia Revenue By : Shri Achal Sharma Cit Dr Date Of Hearing: 21.09.2022 Date Of Pronouncement : 19.12.2022

For Appellant: Shri M P LohiaFor Respondent: Shri Achal Sharma CIT DR

Section 10(25)(iv)Section 139Section 143(1)Section 154Section 2

arose. 04. Assessee filed an application for rectification stating that as the trust is approved w.e.f. 01.01.1979 as approved gratuity fund trust, income of which is exempt u/s. 10(25)(iv) of the Income Tax Act, 1961. 05. On 31.05.2019 an order u/s. 154 of the Act was passed ... have heard the rival contentions and perused the orders of lower authorities. Facts clearly shows that assessee gratuity fund is an approved gratuity fund trust within section 2 (5) of the Act approved by the Commissioner of Income Tax, Bombay City-V, Bombay, by order dated 29.12.1979. For the impugned

M/S. Hindustan Lever Ltd vs. The Dy CIT 1(1)

ITA 1039/MUM/2005[1999-2000]Status: DisposedITAT Mumbai02 Dec 2022AY 1999-2000

For Appellant: Shri Nishant Thakkar &For Respondent: Shri Sandeep Raj

Section 143(3)Section 80Section 80HSection 80I

IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH, MUMBAI SHRI B.R. BASKARAN, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER Hindustan

Income Tax Officer -31(2) (1), Mumbai vs. Johnson & Johnson Pvt. Ltd Gratuity Fund, Mumbai

In the result, appeal of Revenue is allowed for statistical purpose

ITA 1555/MUM/2022[2018-19]Status: DisposedITAT Mumbai15 Nov 2022AY 2018-19

Bench: Shri Vikas Awasthy& Shri S.Rifaur Rahmanआअसं.1555/मुं/2022 ("न.व. 2018-19) The Income-Tax Officer -31(2)(1), Kautilya Bhavan, Room No.615, 6Th Floor, Bandra Kurla Complex, Bandra (E), Mumbai 400 051. ...... अपीलाथ"/Appellant बनाम Vs. Johnson & Johnson Private Limited. Gratuity Fund, 501, Arena Space, Off. Jvlr, Jogeshwari (E), Mumbai 400 060 Pan: Aaaaj-1600-Q .....""तवाद"/Respondent अपीलाथ" "वारा/ Appellant By : Ms. Vranda U Matkarni ""तवाद" "वारा/Respondent By : Shri M.P.Lohia सुनवाई क" "त"थ/ Date Of Hearing : 22/08/2022 घोषणा क" "त"थ/ Date Of Pronouncement : 15/11/2022 आदेश/Order Per Vikash Awasthy, Jm: This Appeal By The Revenue Is Directed Against The Order Of Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [In Short ‘ The Cit(A) ] Dated 28/12/2021 For The Assessment Year 2018-19. 2. Ms. Vranda U Matkarni Representing The Department Submitted That In The First Appellate Proceedings, The Cit(A) Allowed Assessee’S Claim Of 2 Deduction Of Rs.8.44 Crores. The Ld. Departmental Representative Submits That The Cit(A) Failed To Appreciate The Fact That The Said Claim Was Not Made By The Assessee In The Return Of Income Or In The Revised Return Of Income. The Ld. Departmental Representative Further Pointed That The Cit(A) Has Erred In Admitting Fresh Claim Of The Assessee Without Making Enquries & Restored The Same To The Assessing Officer With A Direction To Verify The Same.

For Appellant: Ms. Vranda U MatkarniFor Respondent: Shri M.P.Lohia

Section 10(25)(iv)Section 143(1)Section 250

impugned order and prayed for dismissing the appeal of Revenue. 4. Both sides heard , orders of authorities below examined. The assessee is an approved Gratuity Fund Trust. The assessee during the period relevant to assessment year under appeal earned net income of Rs.8,44,48,363/-. The assessee filed

M/S Expleo Solutions Employees Group Gratuity Scheme, Chennai vs. DCIT, CPC, Bengaluru

In the result, the appeal filed by the assessee is dismissed

ITA 98/CHNY/2022[2016-17]Status: DisposedITAT Chennai28 Sept 2022AY 2016-17

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./I.T.A. No.98/Chny/2022 िनधा"रण वष"/Assessment Year: 2016-17 M/S. Expleo Solutions Employees Vs. The Deputy Commissioner Of Group Gratuity Scheme, 6A, Income Tax, Central Processing No. 283/3, 283/4, Prince Infocity – Ii, Center, Post Bag No. 2, Electronic City Rajiv Gandhi Salai, Omr Post Office, Bangalore 560 500. Kandanchavadi, Chennai 600 096. [Pan:Aabtt3195L] (अपीलाथ"/Appellant) (""थ"/Respondent)

Section 10Section 10(25)(iv)Section 11Section 11(1)(c)

included in total income and clause 25(iv) of section 10 excludes any income received by the trustees on behalf of an approved gratuity fund; shall not be included in computing the total income of a previous year of any person. After considering the explanations of the assessee ... allowed to the assessee. The rectification application filed was also rejected by the CPC, Bangalore. The appellant has submitted that being an approved Gratuity Fund Trust, its income was exempt u/s 10(25)(iv) and thus it was not statutorily required to file its return of income

Cerner Healthcare Solutions India Private Limited (Earlier Known As Cerner India Health Services Private Limited), Bangalore vs. Deputy Commissioner of Income Tax, Circle-2(1)(1), Bangalore

In the result, the appeal by the assessee is allowed

ITA 274/BANG/2022[2017-18]Status: DisposedITAT Bangalore06 Sept 2022AY 2017-18

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri Sumeet Khurana, CAFor Respondent: Shri V S Chakrapani, CIT(DR)(ITAT), Bengaluru

Section 37Section 43B

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESEIDENT AND SHRI PADMAVATHY S, ACCOUNTANT

Jaladurga V S S Sangha Tellaru, Karkala vs. Principal Commissioner of Income Tax, Panaji, Goa

In the result, the appeal of the assessee is partly allowed

ITA 341/BANG/2022[2016-17]Status: DisposedITAT Bangalore16 Aug 2022AY 2016-17

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahuassessment Year : 2016-17

For Appellant: Shri S.V Ravishankar, Advocate by RevenueFor Respondent: Shri Manjunath Karkihalli, CIT (DR) by

Section 143(3)Section 263Section 80P(2)Section 80P(2)(a)

actually paid, This deduction is not on the accrual basis and is on payment basis only. Similarly, employer's contribution to an approved gratuity fund for benefit of his employees is deductible on payment basis. Likewise, when employees contribute to the gratuity fund and this contribution is deposited

M/S Adc India Communications Limited, Bangalore vs. Asst.C.I.T., Bangalore

In the result, the appeal filed by the assessee is partly allowed and the appeal preferred by the Revenue is partly allowed for statistical purposes

ITA 79/BANG/2016[2011-12]Status: DisposedITAT Bangalore29 Apr 2022AY 2011-12

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm It(Tp)A No.41/Bang/2016 : Asst.Year 2011-2012 The Assistant Commissioner Of M/S.Adc India Income-Tax, Circle 1(1)(1) Communications Limited, V. Bangalore. 485/8A & 8B, 14Th Cross, 4Th Phase, P.B.No.8512, Peenya Industrial Area Bangalore – 560 058. Pan : Aaack6553H. (Appellant) (Respondent) It(Tp)A No.79/Bang/2016 : Asst.Year 2011-2012 M/S.Adc India Communications The Assistant Commissioner Limited, 485/8A & 8B, 14Th Cross, Of Income-Tax, Circle 1(1)(1) V. 4Th Phase, P.B.No.8512, Peenya Bangalore. Industrial Area Bangalore – 560 058. (Appellant) (Respondent) Revenue By : Sri.Rajesh Kumar Jha, Cit-Dr Assessee By : Sri.Aliasagar Rampurawala, Ca Date Of Pronouncement : 29.04.2022 Date Of Hearing : 13.04.2022

For Appellant: Sri.Aliasagar Rampurawala, CAFor Respondent: Sri.Rajesh Kumar Jha, CIT-DR

Section 143(3)Section 37(1)Section 40Section 40A(7)Section 9

Corporate Tax issue) 7. As regards the above ground, the learned DR submitted that the TPO has correctly disallowed the contribution made to approved gratuity fund for the reason that the same is in the nature of a provision and not an ascertained liability. The DRP allowed the objections

Asst.C.I.T., Bangalore vs. M/S Adc India Communications Ltd., Bangalore

In the result, the appeal filed by the assessee is partly allowed and the appeal preferred by the Revenue is partly allowed for statistical purposes

ITA 41/BANG/2016[2011-12]Status: DisposedITAT Bangalore29 Apr 2022AY 2011-12

For Appellant: Sri.Aliasagar Rampurawala, CAFor Respondent: Sri.Rajesh Kumar Jha, CIT-DR

Section 143(3)Section 37(1)Section 40Section 40A(7)Section 9

Toyota Material Handling India Pvt. Ltd., Gurgaon vs. ACIT, Circle- 25(2), New Delhi

Appeal of the assessee is treated as allowed

ITA 1638/DEL/2018[2012-13]Status: DisposedITAT Delhi29 Sept 2021AY 2012-13

Bench: Shri Anil Chaturvedi & Shri Sanjay Garg

For Appellant: Sh. Anubhav Rastogi, ARFor Respondent: Sh. Maninder Kaur, Sr. DR

Section 250(6)Section 40A(7)(b)Section 43B

facts and circumstances of the case and in law, has erred in confirming the disallowance of provision made towards contribution to approved gratuity fund, amounting to INR 12,34,312. The appellant reserves its right to add, alter, amend or withdraw all or any grounds of Appeal herein ... issue involved in this appeal is relating to the disallowance made by the Assessing Officer on account of provision made towards contribution to approved gratuity fund amounting to Rs. 12,34,312/-. 3. The assessee during the year claimed an expense of Rs. 17,37,312/- being provision towards gratuity

Punjab National Bankall Cadre Co. T&C Sociiety Ltd, New Delhi vs. ITO, Ward-52(4), New Delhi

The appeal of the assessee is allowed with above direction

ITA 4761/DEL/2017[2013-14]Status: DisposedITAT Delhi04 Aug 2021AY 2013-14

Bench: Shri Kul Bharata N D Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: N o n eFor Respondent: Shri Govind Singhal, Sr. DR

Section 143Section 194JSection 40Section 80Section 80P

provision of gratuity for 2 employees of the society. No details are available with the assessee has paid the above sum to any approved gratuity fund or not. If the assessee has deposited the above sum with the approved gratuity fund that the assessee is eligible for deduction ... above sum in case the above contribution is been deposited with the approved gratuity fund on or before the due date of filing of the return of income. As this information is not available on record we set-aside the whole ground back to the file of the learned assessing

The Commissioner of Income Tax vs. Modipon Ltd

ITA - 78 / 2009HC Delhi23 Dec 2009

Section 154Section 36(1)(va)Section 438Section 43B

enables the assessee to seek deduction in respect of sum paid by it as an employer by way of contribution towards an approved gratuity fund created by him for the exclusive benefit of his employees under an irrevocable trust. Then comes clause (va) which' deals about employees' contribution