DCIT, Jaipur V. JAIPUR THAR GRAMIN BANK, Jaipur

ITA 120/JPR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5395 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 30-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S L PODDAR DHK
• Keywords: Business expenditure; Competent authority
• Section: 37(1); 37

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH EQDQY DS-JKOR] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI MUKUL K. SHRAWAT, JM & SHRI T.R.MEENA, AM VK;DJ VIHY LA-@ ITA NO. 120/JP/2015 FU/KZKJ.K O'K Z @ ASSTT. YEAR : 2011-12. THE DCIT, CIRCLE-2, JAIPUR. CUKE VS. M/S. JAIPUR THAR GRAMIN BANK, 56, SARDAR PATEL MARG, C-SCHEME, JAIPUR. LFKK;H YS[KK LA - @THVKBZVKJ LA - @ PAN/GIR NO. AAAJJ 0519 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI M.S. MEENA (CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR (ADVOCATE) LQUOKBZ DH RKJH[K @ DATE OF HEARING : 08.03.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 11/03/2016. VKNS'K@ ORDER PER MUKUL K. SHRAWAT, JM : THIS IS AN APPEAL FILED BY THE REVENUE EMANATING F ROM AN ORDER OF LD. CIT (A)-I, JAIPUR DATED 05.11.2014. THE GROUNDS RAISED ARE RE PRODUCED BELOW :- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT (A) WAS JUSTIFIED IN LAW IN DIRECTING T O ALLOW DEDUCTION OF EXPENSES IN THE FORM OF CONTRIBUTION TOWARDS GRATUI TY FUND WHICH WAS NOT APPROVED BY THE COMPETENT AUTHORITY. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT (A) WAS JUSTIFIED IN LAW IN ALLOWING DE DUCTION OF RS. 12,66,56,857/- U/S 36(1)(V) EVEN THROUGH THE ASSESS EE JAIPUR THAR GRAMIN BANK HAD NOT FILED ANY APPLICATION FOR APPRO VAL OF GROUP GRATUITY FUND. 2 ITA NO. 120/JP/2015 DCIT VS. JAIPUR THAR GRAMIN BANK 2. AT THE OUTSET, WE HAVE BEEN INFORMED THAT THE IS SUE AS RAISED BY THE REVENUE DEPARTMENT NOW STOOD COVERED BY THE ORDER OF THE TR IBUNAL PRONOUNCED IN ASSESSEES OWN CASE FOR A.Y. 2010-11. EVEN LD. CIT (A) HAS FOL LOWED THE DECISION OF THE ITAT IN ASSESSEES OWN CASE FOR A.YS 2007-08 AND 08-09. FO R THE SAKE OF READY REFERENCE, THE RELEVANT OBSERVATIONS OF LD. CIT (A) ARE REPRODUCED BELOW :- 3.4. I HAVE DULY CONSIDERED SUBMISSIONS OF THE APP ELLANT AND AOS CONTENTION. I HAVE ALSO PERUSED THE MATERIAL ON REC ORD AND DULY CONSIDERED THE FACTUAL MATRIX OF THE CASE AS ALSO T HE APPLICABLE LEGAL POSITION. THE ASSESSEE BANK IS THE REGIONAL RURAL B ANK WHICH IS ESTABLISHED UNDER THE REGIONAL RURAL BANKS ACT, 1976. AS PER C BDT CIRCULAR THE REGIONAL RURAL BANKS ARE COVERED UNDER THE DEFINITI ON OF CO-OPERATIVE BANK, THIS FACT ALREADY ACCEPTED BY THE DEPARTMENT IN THE ASSESSEES CASE IN PREVIOUS YEARS. THE APPELLANT CREATED A GRATUITY TRUST WITH ASSOCIATION OF LIC FOR THE BENEFIT OF ITS EMPLOYEES. DURING THE YEAR UNDER APPEAL THE APPELLANT DEBIT AND PAID A SUM OF RS. 126656857/- T O LIC OF INDIA FOR GRATUITY FUND. IT IS SUBMITTED THAT THE APPELLANT F ORMED A GRATUITY TRUST FOR THE BENEFIT OF ITS EMPLOYEES FOR PAYMENT OF DEATH C UM RETIREMENT GRATUITY WITH LIC OF INDIA AND FILED AN APPLICATION ALONG WI TH TRUST DEED AND OTHER NECESSARY PAPERS TO THE INCOME TAX DEPARTMENT ON 4/ 9/2000 FOR APPROVAL OF GRATUITY FUND. IT IS ALSO SUBMITTED THA T DURING THE YEAR UNDER APPEAL THE APPELLANT DEPOSITED A SUM OF RS. 12,66,5 6,857/- TO THE LIC FOR THE GRATUITY FUND WHICH IS ELIGIBLE DEDUCTION U/S 3 6(1)(V) OF THE INCOME TAX ACT, 1961 AND IF NOT ALLOWED IN THIS SECTION TH AN IT IS ALLOWED U/S 37(1) OF THE INCOME TAX ACT, 1961. IN SUPPORT ARGUMENT AP PELLANT HAS RELIED ON RULINGS MENTIONED IN PARA 3.2 ABOVE IN WHICH TRIBUN AL, HONBLE HIGH COURT AND EVEN HONBLE SUPREME COURT SAID THAT IF THE PAY MENT MADE TO BENEFIT 3 ITA NO. 120/JP/2015 DCIT VS. JAIPUR THAR GRAMIN BANK OF EMPLOYEES THAN IT IS BUSINESS EXPENDITURE AND AL LOWABLE U/S 37(1) OF THE INCOME TAX ACT, 1961. ON PERUSAL OF DECISION OF JURISDICTION ITAT IN ASSE SSEES OWN CASE FOR A.Y. 2007-08 & 2008-09 IN ITA NO. 940/JP/2011 & 196/JP/2012 RESPECTIVELY AND CIT (A)-1S ORDER FOR AY 10-11 VID E ITA NO. 259/12-13, IT IS ALSO SEEN THAT CLAIM OF GRATUITY HAS BEEN ALLOWE D U/S 36(1)(V) READ WITH SECTION 40(A)(9) OF THE ACT. I HAVE CAREFULLY PERUSED THE ORDER OF THE AO AND TH E SUBMISSIONS OF THE AR. THE FACT OF THE MATTER IS THAT THE DISAL LOWANCE OF THE PAYMENT OF GRATUITY TO AN UNAPPROVED GRATUITY FUND WAS CONS IDERED BY THE HONBLE ITAT IN THE CASE OF THE ASSESSEE FOR AY 2007-08 VID E ITS ORDER ITA NO. 940/JP/2011 DATED 31/10/2011 AND THE MATTER WAS DEC IDED IN ITS FAVOUR WITH THE FOLLOWING OBSERVATIONS : .ONCE THE ASSESSEE HAS FILED THE APPLICATION F OR APPROVAL THEN SUCH APPROVAL WILL RELATE TO THE DATE ON WHICH THE APPLICATION FOR APPROVAL HAS BEEN FILED. UNDER THE SIMILAR CIRC UMSTANCES, THIS BENCH IN THE CASE OF RAJASTHAN RAJYA SAHAKARI SANGH LTD. IN ITA NO 702/JP/09 DATED 16/07/2010 HAS HELD THE ALLOWABI LITY OF PAYMENT OF GROUP GRATUITY SCHEME BECAUSE THE ASSESS EE HAS ALREADY FILED THE APPLICATION FOR APPROVAL. ALTERNA TIVELY, THE ASSESSEE IS ENTITLED TO DEDUCTION IN RESPECT OF ACT UAL GRATUITY PAYMENT. HENCE, WE HOLD THAT THE LD. CIT (A) WAS JU STIFIED IN ALLOWING DEDUCTION OF RS. 1.18 CRORES. THOUGH LD. C IT (A) HAS ALLOWED SUCH DEDUCTION U/S 37 YET WE HOLD THAT DEDU CTION IS ALLOWABLE U/S 36(1)(V) READ WITH SECTION 40A(9). IN CASE, THE APPROVAL OF GROUP GRATUITY SCHEME IS NOT GIVEN BY T HE COMPETENT AUTHORITY THEN THE REVENUE WILL BE ENTITLED TO TAKE REMEDIAL MEASURE AS PER LAW .. 3. FURTHER, ANOTHER ORDER OF ITAT JAIPUR BENCH BEAR ING ITA NO. 638/JP/2013 FOR A.Y. 2010-11 DATED 12.02.2016 PRONOUNCED IN ASSESSE ES OWN CASE TITLED AS DCIT VS. 4 ITA NO. 120/JP/2015 DCIT VS. JAIPUR THAR GRAMIN BANK M/S. JAIPUR THAR GRAMIN BANK, THE PAST HISTORY WAS FOLLOWED AND THE SAID APPEAL OF THE REVENUE WAS DISMISSED. SINCE A CONSISTENT VIEW HAD BEEN TAKEN BY THE RESPECTED COORDINATE BENCHES, AS MENTIONED ABOVE, WE FIND NO REASON TO TAKE ANY OTHER VIEW BUT TO FOLLOW THE VIEW ALREADY TAKEN. AS A RESULT, THE GROUNDS RAISED BY THE REVENUE DEPARTMENT ARE HEREBY DISMISSED. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 11/03/201 6. SD/- SD/- VH-VKJ-EHUK EQDQY DS-JKOR ( T.R. MEENA ) (MUKUL K. SHRAWAT) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 11/03/2016. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-M/S. RAGHUVEER METAL INDUSTRIES LTD., DELHI. 2. IZR;FKHZ@ THE RESPONDENT-THE ACIT, CENTRAL CIRCLE, ALWAR. 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.74/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 5 ITA NO. 120/JP/2015 DCIT VS. JAIPUR THAR GRAMIN BANK