1997 (3) TMI 63

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....stified in allowing the contribution made by the assessee to the provident fund of the parent company, namely, MMTC, which was recognised ? " The facts are common in respect of both the assessment years. The assessee is a company registered under the Companies Act. It is in fact a Government company as defined under section 617 of the Companies Act. Government company means any company in which not less than fifty one per cent. of the paid up share capital is held by the Central Government, or by any State Government or Governments, and includes a company which is a subsidiary of a Government company. The Minerals and Metal Trading Corporation of India Ltd. (for short "the MMTC"), is also a Government company within the meaning of sectio....

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....ion 36 of the Act, deduction is allowed in computing the income of the assessee in respect of any sum paid by the assessee as an employer by way of contribution towards a recognised provident fund. As to what is a recognised provident fund reference may be made to clause (38) of section 2 of the Act. According to this clause recognised provident fund means a provident fund which has been and continues to be recognised by the Commissioner in accordance with the rules contained in Part A of the Fourth Schedule and includes a provident fund established under a scheme framed under the Employees' Provident Funds Act, 1952 (19 of 1952). This definition of "recognised provident fund" leads us to Part A of the Fourth Schedule to the Act. There is n....

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....difficult to agree with the views advanced by the assessee that the contribution made by the assessee to the recognised provident fund of the MMTC would be admissible deduction. Mr. Katriar, learned counsel appearing for the assessee, submitted that before the assessee-company was carved out of the MMTC, the employees of the assessee were earlier employees of the MMTC. That may be so but that would not alter the position. The employer is now the assessee and in order to claim deduction, contribution towards the provident fund of its employees has to be deposited in its own recognised provident fund as provided under the Act. Mr. Katriar has referred to the following decisions in support of his contention. (i) CIT v. Burma Corporation Ltd. [....