TaxTMI 
TaxTMI 
2023 (1) TMI 474
X X X X Extracts X X X X
X X X X Extracts X X X X
....)/25/16-17, assessment year-wise, respectively, in proceedings u/s. 143(3) of the Income Tax Act, 1961 (in short "the Act"). 2. Heard both the parties. Case files perused. 3. The Revenue's former appeal ITA. No. 786/PUN./2019 raises the following substantive grounds: 1. The learned Assessing Officer has erred in determining the net taxable income of the appellant at Rs. 4,56,79,340/- as against the returned income of Rs. NIL/-. The addition of Rs. 4,56,79,340/- made by the learned Assessing Officer on account denial of exemption u/s. 11 & 12 of the Act is patently illegal and unsustainable in law and the same may please be deleted. 1.1. The Ld. AO has erred in treating the assessee as 'Association of Persons' (AOP) without....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r Gratuity u/s. 40A(7) of the Act without appreciating that the said provisions are not applicable to the assessee as its income is chargeable to tax under the head of 'Income from Other Sources'. 5. The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal." 4. The Revenue's pleadings are no different in its latter appeal ITA. No. 787/PUN./2019 for assessment year 2013-14 wherein the only difference is that of the amount of sec. 40A(7)(b) disallowance of Rs. 2,41,27,211/- and Rs. 2,76,54,732/- appeal-wise, respectively. 5. We first of all come to the Revenue's identical pleadings in its grounds nos. 1 to 4 and note with the able assistance coming from the both the parties that the Asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns done towards an approved gratuity fund. Admittedly, the same had not been done and therefore such provision for gratuity could not be allowed as expenditure u/s. 40A(7) of the Act. The AO, therefore, had added the same to the total income. 7.1 The appellant in the written submission dated 20/04/2018 in this connection, vide para 4, submitted as below:- "4. Ground No. 4 - Disallowance of Provision for Gratuity u/s. 40A(7) of the Act: 4.1] For the year under consideration, the appellant has debited an amount of Rs. 2,41,27,211/- to Income & Expenditure A/c. on account of Provision for Gratuity to employees as per the accrual system of accounting. While completing the assessment, the Ld. AO has treated the assessee as an AOP and accor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eld income for purposes of section 11(1)(a) has to be computed on commercial basis without reference to normal provisions of the Act. It is therefore prayed before your honour that the addition made u/s. 40A(7) of the Act may kindly be deleted as the assessee is eligible for exemption u/s. 11 and not to be treated as AOP." 7.2 I have perused the assessment order, the submission of the appellant and the materials on record carefully. I find that the Hon'ble ITAT Pune vide order in ITA nos. 921 to 923/PN/2012 dated 16/05/2017 for A.Ys. 2005-06 to 2007-08 in this regard vide paras 160 to 162 had allowed the assessee's appeal holding as below:- "160. The next issue which is common for all the years is regarding disallowance u/s. 43B....