TaxTMI 
TaxTMI 
2026 (8) TMI 1439
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....reinafter 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 2020-21, 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) 2020-21, the assessee filed its Return of Income on March 11, 2022, declaring a total income of Rs. 227,13,00,220/-. This return was initially processed under the provisions of Section 143....
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....1,23,083/-. However, the Ld. CIT(A), NFAC dismissed the assessee's appeal and confirmed the additions made on account of the Section 14A(2) disallowance of Rs. 21,13,100/- and the Section 41 deemed profit of Rs. 5,35,626/-. Dissatisfied with the deletion of the substantial additions, the revenue preferred a second appeal before the Learned Income Tax Appellate Tribunal (ITAT), Kolkata, solely on the issue of the contribution to the Superannuation Fund of Rs. 564,49,19,729/-. The revenue accepted the Ld. CIT(A)'s deletion regarding the Calcutta Port Officers' Club contribution and no further appeal was preferred on that ground. The assessee-respondent also filed cross-objections before the ITAT. 4. The ITAT, following the lega....
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....htly considered by the A.O. as regular contribution? ii. 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 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? iii. Whether the order of the Learned Tribunal is perverse, arbitrary, and contrary to the provisions of th....
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....s 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's contention. The legal nature of a contribution is defined by its purpose i.e., remedying an actuarial deficit and not by how many years the deficit takes to be fully addressed. A persistent deficit caused by past funding constraints cannot convert ad hoc gap-filling payments into ordinary annual contributions. To superimpose the Rule 87 ceiling on necessary, actuarially-backed funding of an approved fund would compromise the solvency of the fund and is contr....