M/s. Kurmanchal Nagar, Nainital v. DCIT, Nainital

ITA 3273/DEL/2010 | 2007-2008
Pronouncement Date: 01-09-2010 | Result: Allowed

Appeal Details

RSA Number 327320114 RSA 2010
Assessee PAN AABCK2683H
Bench Delhi
Appeal Number ITA 3273/DEL/2010
Duration Of Justice 1 month(s) 30 day(s)
Appellant M/s. Kurmanchal Nagar, Nainital
Respondent DCIT, Nainital
Appeal Type Income Tax Appeal
Pronouncement Date 01-09-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 01-09-2010
Date Of Final Hearing 01-09-2010
Next Hearing Date 01-09-2010
Assessment Year 2007-2008
Appeal Filed On 02-07-2010
Judgment Text
ITA NO. 3273/DEL/2010 A.Y. 2007-08 1 9IIN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 3273/DEL/2010 A.Y. : 2007-08 M/S KURMANCHAL NAGAR SAHKARI BANK LTD. TALLITAL NAINITAL (PAN: AABCK2683H) VS. DY. COMMISSIONER OF INCOME TAX NAINITAL (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : NONE DEPARTMENT BY : SH. MANEESH BAHUGUNA. SR. D.R. PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 16.2.2 010 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INC OME TAX (APPEALS) ERRED IN UPHOLDING THE DISALLOWANCE OF ` 6 53 842/- U/S 36(1)(V) OF THE IT ACT BEING PAYMENT MADE BY THE ASSESSEE TO THE LIFE INSURANCE CORPORATION OF INDIA AS ITS CONTRIBU TION OF GROUP GRATUITY SCHEME. IT HAS BEEN FURTHER URGED THAT LD. COMMISSI ONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THE APPELLAN TS ALTERNATE PLEA ITA NO. 3273/DEL/2010 A.Y. 2007-08 2 THAT AFORESAID PAYMENT MADE TO LIC IS AN ADMISSIBLE EX PENDITURE U/S 37 OF THE IT ACT. 3. ON THIS ISSUE THE ASSESSING OFFICER OBSERVED TH AT ASSESSEE HAS CONTRIBUTED ` 6 53 842/- TOWARDS A GROUP GRATUITY SCHEME TAKEN FROM LIC OF INDIA. ASSESSING OFFICER OPINED THAT THE AMOUNT WAS NOT ALLOWABLE IN TERMS OF SECTION 36(1)(V). THE ASS ESSEE EXPLAINED THAT THE ISSUE OF ADMISSIBILITY THE AMOUNT PAID TO L IC OF INDIA DIRECTLY WAS COVERED IN ITS FAVOUR BY THE DECISION OF THE C. I.T. VS. TEXTOOL CO. P. LTD. (2002) 122 TAXMAN 66. THE ASSESSEE REFERRED TO CERTAIN OTHER CASE LAWS ALSO BUT THE ASSESSING OFFICER DID NOT FIND THE ABOVE ACCEPTABLE. HE HELD THAT THE FACTS IN THE CASE OF C.I.T. VS. TEXTOOL CO. P LTRD. WERE DIFFERENT AND HE PROCEEDED TO DISALLOW THE GRATUITY PAYMENT OF ` 6 53 942/-. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ASSESSING OFFICER S ACTION . 5. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEF ORE US. 6. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATI VE AND PERUSED THE RECORDS. NONE APPEARED ON BEHALF OF T HE ASSESSEE BUT AN ADJOURNMENT REQUEST HAS BEEN RECEIVED. HOWEVER I N OUR ITA NO. 3273/DEL/2010 A.Y. 2007-08 3 CONSIDERED OPINION THE ISSUE CAN BE ADJUDICATED UPON HEARING THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSING THE RECORDS. 6.1 HENCE WE PROCEED TO ADJUDICATE THIS ISSUE BY R EJECTING THE ADJOURNMENT REQUEST. WE FIND THAT THE ASSESSEE IN T HIS CASE HAS MADE CONTRIBUTION TO GROUP GRATUITY SCHEME OF LIC OF IND IA FOR AN AMOUNT OF ` 6 53 842/-. THIS HAS BEEN DISALLOWED BY THE R EVENUE ON THE GROUND THAT IT IS NOT AN APPROVED GRATUITY FUND. WE FIND THAT THE ISSUE INVOLVED IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CAS E OF C.I.T. VS. TAXTOOL CO. P LTD. 122 TAXMAN 668. IN THIS CASE FOR CONTRIBUTION TO APPROVED GRATUITY FUND DIRECT PAYMENT WAS MADE TO LIC TOWARDS GROUP GRATUITY FUND. THE HONBLE COURT HAD HE LD MERELY BECAUSE THE PAYMENT WAS MADE DIRECTLY TO LIC ASSESSEE COULD NOT DENIED THE BENEFIT OF SECTION 36(1)(V) AND DEDUCTION ALLOWABL E. FACTS IN THE PRESENT CASE ARE IDENTICAL. ASSESSEE HAD MADE CON TRIBUTION TOWARDS GRATUITY OF ITS EMPLOYEES DIRECTLY TO LIC OF INDIA. LIFE INSURANCE CORPORATION OF INDIA IS A GOVERNMENT OF INDIA UNDE RTAKING. HENCE THE AMOUNT PAID HAS TO BE ALLOWED AS ALLOWABLE EXPENDIT URE. UNDER THE CIRCUMSTANCES RESPECTFULLY FOLLOWING THE PRECEDENT AS ABOVE WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DECID E THE ISSUE IN FAVOUR OF THE ASSESSEE. ITA NO. 3273/DEL/2010 A.Y. 2007-08 4 7. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 01/09/2010 UP ON CONCLUSION OF HEARING. SD/- SD/- [ [[ [I.P. BANSAL I.P. BANSAL I.P. BANSAL I.P. BANSAL] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 01/09/2010 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES