2021 (8) TMI 1032

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....a)(ia) of the Income Tax Act, 1961. 3. Briefly the facts are, the assessee is a resident company engaged in the business of distribution of investment oriented financial products and fixed income products, stock broking and depository services, merchant banking and investment banking. For the assessment year under dispute, the assessee filed its return of income on 29.11.2013 declaring loss of Rs. 9,68,60,314/-. In course of assessment proceedings, the Assessing Officer (AO) while verifying the tax audit report noticed that the auditor has stated that the assessee has made provision for payment of gratuity of Rs. 13,14,859/-, which is not allowable under section 40(a)(ia) of the Act. Whereas, the assessee had not added back the amount wh....

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....to the gratuity scheme created for benefit of employees is allowable as deduction. In support of such contention he relied upon the following decisions: 1. "CIT v. Textool Co. Ltd. (2013) 35 taxmann.com 639 (SC). 2. Narasu's Spinning Mills v. ACIT, Circle - 1(2), Chennai, (2016) 66 taxmann.com 277 (Chennai-Trib.). 3. ACIT, Company Circle-III (4), Chennai v. Verizon Data Services India (P) Ltd. (2017) 82 taxmann.com 50 (Chennai-Trib.). 4. Capital IQ Information Systems (India) (P) Ltd. v. Additional Commissioner of Income Tax, Circle 1(2), Hyderabad (2014) 49 taxmann.com 313 (Hyderabad-Trib). 5. CIT v. Jaipur Thar Gramin Bank, (2016) 388 ITR 228 (Rajasthan) 6. Rajasthan Financial Corpn. V....

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....pplication seeking approval of the gratuity scheme has been kept in suspended animation till date and no order either approving or rejecting the application has been passed by the Competent Authority. On a specific query, learned Departmental Representative could not controvert this fact. It is also evident, in terms of the gratuity scheme the assessee is regularly contributing to Tata AIG Life Insurance Company Ltd. towards the gratuity benefit of its employees. The aforesaid factual position has not been disputed either by AO or learned Commissioner (Appeals). The only reason for disallowance of assessee's claim of deduction is due to non-approval of the gratuity scheme. When, it is fact on record that assessee has applied for approval of....

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....laimed can be made. In this regard, we may refer to the following decisions:- 1. "Narasu's Spinning Mills v. ACIT, Circle - 1(2), Chennai, (2016) 66 taxmann.com 277 (Chennai-Trib.). 2. ACIT, Company Circle-III (4), Chennai v. Verizon Data Services India (P) Ltd. (2017) 82 taxmann.com 50 (Chennai-Trib.). 3. CIT v. Jaipur Thar Gramin Bank, (2016) 388 ITR 228 (Rajasthan) 4. Rajasthan Financial Corpn. V. Deputy Commissioner of Income Tax (1998) 66 ITD 1936 (Jaipur) 5. Pr. Commissioner of Income Tax v. Rajasthan State Seed Corporation Ltd. (386 ITR 267) (Raj)" 10. Thus, the legal principle which emerges from the aforesaid judicial precedents is, no disallowance of deduction claimed towards provisio....