sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
From the Courts »
 Principal Commissioner Of Income Tax, Delhi-17, Vs. M/s Wadhawan Designs
 ITO vs. Yadu Steels & Power Pvt. Ltd (ITAT Delhi)
 Mahavir Jhanwar vs. ITO (ITAT Kolkata)
 Cenveo Publisher Services India Ltd vs. UOI (Bombay High Court)
 PCIT vs. Hardik Bharat Patel (Bombay High Court)
 PCIT vs. NDR Promoters Pvt. Ltd (Delhi High Court)
 Utech Developers Ltd. 305, 3rd Floor Bhanot Corner Pamposh Enclave, G.K.-I New Delhi 110 048 vs. ITO, Ward 18(1) New Delhi
 DCIT, Circle 5(1) Room No.390 C.R.building I.P.Estate New Delhi vs. BSES Yamuna Power Ltd. Shakti Kiran building Karkardoma Delhi 110 092
 DCIT, Circle 8(1) Room No.415 4th floor C.R.building I.P.Estate New Delhi 110 002 vs. Engineers India Ltd. Engineers India Bhawan 1, Bhikaji Cama Place R.K.Puram
 Sh. Gulashanobar, Sanjay Parashar, Adv., 47-A, Devika Chamber, Raj Nagar, District Centre, Ghaziabad vs. Income Tax Officer, Ward-1(2), Ghaziabad
 The DCIT, Central Circle-31, Room No.319, E-2, ARA Centre, Jhandewalan Extn. New Delhi. vs. M/s. Sutlej Agro Products Ltd., 30, Community Centre, Saket, New Delhi.

CIT vs. Textool Co. Ltd (Supreme Court)
June, 17th 2013

Though s. 36(1)(v) requires direct payment to the gratuity trust fund, payment to the LIC Group Gratuity Scheme is also allowable

The assessee set up a gratuity fund which was duly approved by the CIT. However, instead of making payment to the fund directly, the assessee paid an amount of Rs. 50 lakhs as initial contribution and an amount of Rs. 5 lakhs as annual premium to the Life Insurance Corporation (“LIC”) pursuant to the group Life Assurance Scheme framed by the LIC for the benefit of the employees of the assessee. The AO disallowed the claim for deduction on the ground that payment towards the gratuity fund was not made to an approved gratuity fund and was not allowable u/s 36(1)(v). The CIT(A), Tribunal and High Court (257 ITR 39 (Mad)) upheld the assessee’s claim on the basis that the payment to LIC under the Group Life Assurance Scheme was for the exclusive benefit of the employees of the assessee under the policy issued by it and that the conditions stipulated in s. 36(1)(v) had not been violated. On appeal by the department to the Supreme Court, HELD dismissing the appeal:

While it is true that a fiscal statute has to be construed strictly and nothing should be added to or subtracted from it, yet a strict construction of a provision does not rule out the application of the principles of reasonable construction to give effect to the purpose and intention of any particular provision of the Act. From a bare reading of s. 36(1)(v), it is manifest that the real intention behind the provision is that the employer should not have any control over the funds of the irrevocable trust created exclusively for the benefit of the employees. On facts, it is evident that the assessee had absolutely no control over the fund created by the LIC for the benefit of the employees of the assessee and further all the contribution made by the assessee in the said fund ultimately came back to the Textool Employees Gratuity Fund, approved by the CIT. Thus, the conditions stipulated in s. 36(1)(v) were satisfied.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2019 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - About Us

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions