2021 (9) TMI 577

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... u/s 40A(3) of the Income Tax Act, 1961 (in short 'the Act') in respect of deduction claimed by the assessee u/s 35DDA(1) read with section Rule 6DD of the Income Tax Rule, 1962. 3. The brief facts relevant to the issue are that the assessee had a factory at 36, B.T. Road, Kolkata-56. There was a prolonged labour strike from 19.08.2010 in the factory and discussions at tripartite level was done between the labour union, the management and Deputy / Asst. Labour Commissioner, Barackpore, Govt. of West Bengal. The settlement was done on 25.06.2011 and a voluntary separation scheme was finalized. As per the said settlement the key issue was in view of huge financial loss of the assessee's factory due to unviable products, changed railway procu....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f the amount paid as voluntary retirement benefits for each of the consecutive previous year in which the expenditure was actually incurred. The assessee claimed Rs.5,92,661/- being 1/5th of the VSS expenditure actually incurred of Rs.29,63,309/- u/s 35DDA(1) of the Act. However, Ld. Assessing Officer (in short "AO") during the assessment proceedings disallowed the entire VSS of Rs.29,63,309/-. 4. Aggrieved by the said order of the Assessing Officer, the assessee preferred appeal before the Ld.CIT(A), but remained unsuccessful. 5. Before this Tribunal, the Ld. counsel for the assessee has submitted that the payment in cash was made to the employees / labourer out of compulsion as the factory of the assessee has been stopped due to labour ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....The co-ordinate bench of the Tribunal in the case of Shri Daljit Singh vs. ACIT, Circle-40 Kolkata in ITA No.769/Kol/2018 vide order dated 03.04.2019 has extensively discussed about the scope of the disallowance which can be made u/s 40A(3) of the Act, and after relying upon various case laws including the decision of the co-ordinate Jaipur bench in the case of A. Daga Royal Arts vs. Income Tax Officer, Ward-2(2), Jaipur ITA No.1065/JP/2016 vide order dated 15.05.2018 in which further reliance has been placed on the decision of the Hon'ble Supreme Court in the case of Attar Singh Gurmukh Singh vs. Income Tax Officer Ludhiana Etc. (1991) AIR 2109, has held that the Rule 6DD which provides for exceptions u/s 40A(3) of the Act against appl....