2021 (11) TMI 572

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....lant : Mr.M.Swaminathan For the Respondent : Mr.R.Vijayaraghavan JUDGMENT T.S.SIVAGNANAM, J. This appeal, by the appellant/Revenue, filed under Section 260A of the Income Tax Act, 1961, is directed against the order dated 10.01.2014 made in M.P.No.205/Mds/2013 in I.T.A.No.931/Mds/2011 on the file of the Income Tax Appellate Tribunal 'A' Bench, Chennai for the assessment year 20....

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.... 143(3) of the Income Tax Act, 1961, the Assessing Officer found that the assessee had claimed deduction on the exgratia payment made to employees who were not covered by the provisions of the Payment of Bonus Act. The assessee contended that it was a type of incentive given to those employees, who did not fall under the provisions of the Payment of Bonus Act. The claim of the assessee was rejecte....

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....not fall within the purview of the Payment of Bonus Act. The provisions under Section 36(1)(ii) of the Income Tax Act, 1961 covered specific instances stated therein and that ex-gratia payment made to employees in excess of statutory limit was considered as a head of deduction. In this the Tribunal referred to the decision of the Calcutta High Court reported in (1994) 208 ITR 1002(Cal) [CIT vs. Na....

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....being no restriction or prohibition under Section 37 of the Income Tax Act, 1961 on the claim for deduction on the ex-gratia payment given in the form of an incentive to the workman out of business expediency and the payment being a business expenditure, the Revenue's case deserves to be dismissed at the admission stage itself. 5. In the result, the Tax Case (Appeal) is dismissed. No ....