TaxTMI 
TaxTMI 
TaxTMI 
2006 (8) TMI 99
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....the basis of the decision of this hon'ble court in CIT v. Aspinwall and Co. Ltd. reported, in [1993] 204 ITR 225 in the appellant's own case? (c) Whether, on the facts and circumstances of the case was the Tribunal justified in disallowing the amount of Rs. 59,228 being the expenditure incurred by the assessee for giving gifts and presents given to business clients ? (d) Whether on the facts and circumstances of the case the Tribunal is right in holding that the expenditure incurred for giving presents is an entertainment expenditure for the purpose of section 37(2) and not an expenditure allowable under section 37(1) of the Income-tax Act ? (e) Whether on the facts and circumstances of the case was the Tribunal justified in confirming the disallowance of contribution to the Cob Workers Welfare Fund by applying section 43B of the Income- tax Act and in holding that it cannot be allowed unless the payment was made within the 'due date' is contemplated under the said section? (f) Whether on the facts and circumstances of the case was the Appellate Tribunal justified in confirming disallowance of expenditure for maintenance of accommodation for visitors in the estate and the expen....
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....o get deduction in respect of the contribution to the Executive Staff Provident Fund. That decision related to the assessment year 1979-80. Later I. T. A. Nos. 21 of 1999 and 25 of 1999 also came up for consideration before this court. The question raised was whether the assessee was qualified and entitled to deduction under section 36(1)(iv) of the Income-tax Act for the contribution made td the Executive Staff Provident Fund. This court in CIT v. Aspinwall and Co. Ltd. [1993] 204 ITR 225, following the earlier decision in Aspinwall and Co. (Travancore) Ltd.'s case [1992] 194 ITR 739 (Ker), answered the reference in favour of the assessee and held that the Tribunal had not committed any error in allowing a deduction of Rs. 52,781 paid by the assessee to the Executive Staff Provident Fund. The contention was raised by the assessee in all these cases that in view of the decision of this of court referred to above, the assessee is entitled to get deduction for the amount paid to the unrecognised provident fund expenditure as provided in clause (iv) or clause (v) of sub-section (1) of section 36. The contention of raised by the assessee was refuted by the Revenue before the Tribunal c....
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....llowed in respect of the matters dealt with therein, in computing the income referred to in section 23. Section 36(1)(iv) is extracted below for easy reference : "(iv) any sum paid by the assessee as an employer by way of contribution towards a recognised provident fund or an approved Superannuation fund, subject to such limits as may be prescribed for the purpose of recognising the provident fund or approving the superannuation fund, as the case may be, and subject to such conditions as the Board may think fit to specify in cases where the contributions are not in the nature of annual contributions of fixed amounts or annual contributions fixed on some definite basis by reference to the income chargeable under the head 'Salaries' or to the contributions or to the number of members of the fund ;" 8 Section 37(1) is a general provision which says that any expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee, laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head "Profits and gains of....
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....etc. for any purposes within the limits laid down under the provisions to recognised provident fund. We may in this connection refer to the decision of the apex court in Shree Sajjan Mills Ltd. v. CIT [1985] 156 ITR 585. In that case the apex court affirmed the decision of the Madhya Pradesh High Court (CIT v. Shree Sajjan Mills Ltd. [1985] 147 ITR 185) and held that for the gratuity to be deductible, the conditions laid down in section 40A(7) had to be fulfilled and that deduction could not be allowed on general principles under any other provisions of the Act relating to computation of income under the head "Profits and gains of business or profession". In other words, section 40A had the effect of notwithstanding anything contained in sections 30 to 39 of the Act. In view of the above, no deduction would be allowed in respect of any contribution towards provident fund. The same principle could be adopted in the matter of section 40A as well. 10 We have already indicated that section 36(1)(iv) of the Act provides that any sum paid by the assessee as an employer by way of contribution towards recognised provident fund or an approved superannuation fund subject to such limits as m....