TaxTMI 
TaxTMI 
2026 (8) TMI 1440
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....he 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 2017-18, 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) 2017-18, the assessee filed its original return of income on October 27, 2017, declaring Nil income after claiming a set-off of brought forward business loss to ....
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....the decision of the Ld. CIT(A), the revenue preferred a second appeal before the Learned Income Tax Appellate Tribunal (ITAT), Kolkata, solely on the following two issues i.e., contribution to superannuation fund of Rs. 208,86,57,648/- and contribution to gratuity fund of Rs. 53,85,13,674/- (originally assessed as Rs. 63,85,13,674/-). The decision of the Ld. CIT(A) on the remaining issues was deemed acceptable to the Department and further appeal before the ITAT was not preferred on those grounds. The assessee also filed cross-objections before the ITAT. 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. ....
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....f the Ld. CIT(Appeals), NFAC, Delhi by placing reliance on the decision of the Hon'ble Calcutta High Court in the case of Exide Industries reported in [2023] 146 taxmann.com 21 (Cal) and failing to appreciate that the facts of the instant case are different from that of Exide Industries as in the case of the assessee, the excess contribution to meet shortfall in fund balance was a regular practice over past several years and not a onetime exception which was the facts in case of Exide Industries? iii. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT erred in upholding the order of the Ld. CIT(Appeals), NFAC, Delhi deleting the disallowance of Rs. 63,85,13,674 made by the A.O. on account of contrib....
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....e these payments were ad hoc interim contributions made specifically to bridge the gap in actuarial valuation, they were neither ordinary annual contributions under Rule 87 nor initial contributions under Rule 88. The ITAT relied on the High Court decision in Exide Industries Ltd. (supra), which established that the statutory ceiling of Rule 87 does not apply to extraordinary contributions made to address actuarial deficits. 8. The revenue argued before this Court that the case of Exide Industries Ltd. (supra) is distinguishable because the assessee's practice of funding shortfalls was a regular, recurring method of operation over past years, rather than an exceptional one-time payment. This Court is unable to accept the revenue'....
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....nce Corporation of India (LIC), remained capable of discharging its lawful obligations. As such, it does not fall under the restrictive definition of an ordinary annual contribution as contemplated by Rule 103. 10. Furthermore, Section 36(1)(v) of the Income Tax Act, which governs deductions for contributions to approved gratuity funds, does not per se impose the 8.33% restriction found in the Rules. Section 36(1)(v) allows deduction of any sum paid by the employer by way of contribution towards an approved gratuity fund created for the exclusive benefit of employees under an irrevocable trust, without imposing any 8.33% ceiling. As the assessee's Gratuity Fund remains an approved fund recognised by the Commissioner, the taxing authority....