2026 (9) TMI 367

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....diction u/s. 263 of the Income Tax Act [hereinafter referred as "the Act"]. 2. The brief facts of the case are that the assessee had filed its return of income for A.Y. 2022-23 on 27.10.2022 declaring income of Rs. 1,77,39,340/-. The case was selected for scrutiny under CASS. The assessment was completed u/s. 143(3) of the Act on 27.03.2024 as per returned income. Subsequently, the case record was called for and examined by the Ld. PCIT. He found that the assessee had made payment of Rs. 33,53,965/- to LIC Group Gratuity Scheme as per demand request sent by the LIC. According to the Ld. PCIT, contribution towards approved gratuity found was deductible to the extent of 8.33% of employees' salary in accordance with Rule 103 of the Income T....

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....de to approved Group Gratuity Scheme. In this regard, he placed reliance on the following decisions. 1. CIT Vs. Textool Co. Ltd. [(2013) 263 CTR 257(SC)] 2. CIT Vs. Standard Chartered Grindlays Ltd. [ITA 388/2019] 3. CIT Vs. Eastern Equipment & Sales Ltd. [(1993) 201 ITR 858(Cal)] 4. Triplicate Permanent Fund Ltd. Vs. CIT[(1989) 179 ITR 492(Mad)] 5. CIT Vs. Rayalaseema Passenger & Goods Transports Pvt. Ltd. [(1997) 230 ITR 332 (Mad)] 6. CIT Vs. Premier Cotton Spg. Mills Ltd. [(2002) 258 ITR 253 (Mad)] 5. Per Contra, Shri Kiran Unavekar, the Ld. CIT-DR submitted that as per Rule 103 of the Income Tax Rules, the assessee was entitled for deduction in respect of contribution to the exten....

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....ary of the employees. Similarly, the Hon'ble Madras High Court has held in the case of Triplicane Permanent Fund Ltd. Vs. CIT (supra) that excessive contribution made towards gratuity liability beyond 8.33% was allowable as deduction u/s. 37 of the Act. An identical view was taken by Hon'ble Madras High Court in the case of CIT vs. Premier Cotton Spg. Mills Ltd.(Supra). 7. In view of the above settled laws in this issue, the assessee had rightly claimed deduction for payment to LIC Group Gratuity Scheme as per the demand request sent by LIC. The demand was raised as per the actuarial valuation and the Auditor too had not pointed out any infirmity in the claim for deduction as made by the assessee. This issue was also examined by the AO i....