2026 (8) TMI 1441

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....d this appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), challenging the order dated November 18, 2024 passed by the Learned Income Tax Appellate Tribunal (ITAT), Kolkata Bench "B", for the assessment year AY 2021-22, on the substantial questions of law formulated at the time of admission. 2. The facts in a nutshell are that the assessee-respondent, formerly known as the Kolkata Port Trust (KoPT), is an Artificial Juridical Person with a history of providing essential port services for nearly 150 years since its establishment in the year 1870. For the Assessment Year (AY) 2021-22, the assessee filed its return of income on March 11, 2022, declaring a total income of Rs.212,86,43,210/-. This ret....

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....deletion of the actuarial deficit funding for the Superannuation Fund. 4. The ITAT, following the legal principles established by the Hon'ble Calcutta High Court in the cases of PCIT v. Exide Industries Ltd (2023) and Eastern Equipment Sales Ltd. or CIT v. Eastern Equipment & Sales Limited reported in 71 taxmann.com 226(Cal), confirmed the decision of the Ld. CIT(A) and deleted the additions. Regarding the superannuation and gratuity funds, the ITAT observed that the remitted amounts were intended to bridge the gap between actual contributions and actuarial valuations. The Tribunal held that such payments were neither initial contributions nor ordinary annual contributions, meaning the ceilings fixed under the respective rules did not ap....

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....of the Learned Tribunal is perverse, arbitrary, and contrary to the provisions of the Income Tax Act, 1961, and deserves to be set aside? 6. We have heard the appellant-revenue and Learned Senior Counsel for the respondent-assessee at length. Since the issues involved are pure questions of law, this Court proceed to decide the appeal on merits. 7. The Assessing Officer (AO) disallowed Rs. 648,84,64,174 on account of contributions made to the Superannuation Fund in excess of the 27% ceiling fixed under Rule 87 of the Income-tax Rules, 1962. The assessee submitted that the contribution was necessitated to meet a severe deficit revealed by an actuarial valuation of the Superannuation Fund. For several preceding years, the assessee could ....

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....funding of an approved fund would compromise the solvency of the fund and is contrary to the scheme of Section 36(1)(iv) of the Act. The ITAT committed no error in upholding the deletion of the disallowance. We answer substantial questions of law (1) and (2) in negative, i.e., against the appellant revenue and in favour of the respondent assessee. The deletion of the disallowance of Rs. 648,84,64,174/- is hereby upheld. 9. Regarding the overall validity of the ITAT order, herein being question no. 3, while the revenue disputes the findings on superannuation and gratuity, the order itself is not perverse or arbitrary in a legal sense. The ITAT reached its conclusions by placing reliance on jurisdictional high court precedents, such as Exi....