Orient Fashion Exports India Pvt Ltd Employees Group Gratituty Scheme, New Delhi V. Pr. CIT - 10, New Delhi

ITA 731/DEL/2021

AI Insights

The case involves Orient Fashion Exports India Pvt. Ltd., which operates an Employees Group Gratuity Scheme. The scheme's income was initially deemed exempt from tax under section 10(25)(iv) of the Income Tax Act, 1961. However, the Principal Commissioner of Income Tax (PCIT-10) made additions to the assessee's income, questioning the scheme's 'approved' status. The assessee had applied for approval in 2005, which was granted. The Tribunal's decision reversed the PCIT's additions, confirming the scheme's exempt status based on its approved status.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131811 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 28-11-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 15-06-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 263

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL DELHIBENCH ‘E’, NEW DELHI Before Dr. B. R. R. Kumar, Accountant Member Sh. Yogesh Kumar US, Judicial Member ITA No. 731/Del/2021 : Asstt. Year : 2016-17 Orient Fashion Exports India Pvt. Ltd., Employees Group Gratuity Scheme, E-45/14, Okhla Industrial Area, Phase- II, New Delhi-110020 Vs Pr. CIT-10, New Delhi-110002 (APPELLANT) (RESPONDENT) PAN No. AAAAO0843J Assessee by : Sh. Swadanjit Singh, Adv. Revenue by : Ms. Sarita Kumari, CIT DR Date of Hearing: 29.11.2022 Date of Pronouncement: 08.02.2023 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order of ld. PCIT-10, Delhi dated 16.03.2021. 2. Following grounds have been raised by the assessee: “1. That the ld. Commissioner of Income Tax, Delhi-10 has grossly erred in law as well as facts of the case while making an additions of Rs.2,00,98,058/- on account of contribution received and Rs.78,99,838/- on account of interest earned by the appellant who is an “Employees Group Gratuity Scheme” and whose income is exempt from tax u/s 10(25)(iv) of the Act on the ground that the appellant is not an “Approved” Gratuity Fund whereas the appellant has applied for necessary approval vide its letter dated 31.03.2005 to the Commissioner of Income Tax, Delhi-V, New Delhi and the necessary approval has been granted by Commissioner of Income Tax-V, New Delhi vide order No. CIT-V/Gratuity/05-06/590 dated 27.06.2005.” ITA No. 731/Del/2021 Orient Fashion Exports India Pvt. Ltd. 2 3. Heard the arguments of both the parties and perused the material available on record. 4. We have gone through the assessment order wherein, the return filed declaring income of Rs. Nil, has been accepted by the AO. 5. The ld PCIT passed u/s 263 enhancing the income of the assessee after disallowing the exempt income claimed u/s 10(23AAA) of the Act received by way of contribution of Rs. 2,00,98,050/- and interest income thereon of Rs. 78,99,830/-. 6. At the outset it was brought to our notice that approval of Gratuity Scheme under Part “C” of the Fourth Schedule of Income Tax Act, 1961 was accorded to the assessee by the ld. CIT-5, Delhi. Since, the assessee has been duly approved, no case of loss of revenue could be discerned. Hence, the appeal of the assessee is allowed. 7. In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 08/02/2023. Sd/- Sd/- (Yogesh Kumar US) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 08/02/2023 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR