2014 (1) TMI 649

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.... 144C(2) before the Dispute Resolution Panel on 24/01/2012 against the draft assessment order of the Addl. CIT, Range-I, Hyderabad. The DRP passed its order on 03/08/2012 and the order u/s 143(3) read with section 144C(2) of the Act, 1961, was passed by the Addl. CIT, Range - 1, on 30/11/2012 in pursuance of the proceedings before the DRP. 3. Aggrieved, the assessee is in appeal before us. 4. Ground No.1 is general in nature and, hence, need no adjudication. 5. Ground No. 3 is regarding levy of interest u/s 234B of the Act. Charging of interest u/s 234B is consequential in nature, therefore, the AO is directed accordingly. 6. Ground No. 4 is regarding initiation of penalty proceedings u/s 271(1)(c) Act. This ground is premature ....

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....he orders of the authorities below. We find that the issue is squarely covered by the decision of the ITAT, Hyderabad in the case of M/s Sri Krishna Drugs Ltd. Vs. Department of Income-tax in ITA No. 2126/Hyd/2011 for AY 2007-08 dated 11/04/2012, where the JM was one of the party. The Tribunal in the said case held as follows:- 3. The second ground raised by the Revenue is as under: "The learned CIT(A) erred in holding that unrecognised gratuity fund is allowable u/s. 37(1),when the case is hit by the provisions of section 40A(9) and especially when the assessee failed to comply with the provisions of section 36(1)(v)." 4. After hearing both the sides, we find this issue is covered in favour of the assessee and against the Revenue in ....

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....e business or profession, while computing income chargeable to tax. The main contention of the Revenue is that under sec. 36(1)(v), the payment made by the assessee as employer could be allowed only in respect of approved gratuity fund. Since the Group Gratuity Scheme is not approved by the CIT, according to the Revenue, it cannot be allowed. However, the contention of the assessee is that in view of the judgement of the Madras High Court in the case of Premier Cotton Spinning Mills Ltd. (supra) and the judgement of the jurisdictional High Court in the case of Warner Hindustan Ltd. (supra), it has to be allowed. 5. We have carefully gone through the judgement of the jurisdictional High Court in the case of Warner Hindustan Ltd. (supra). ....