Latest Expert Exchange Queries
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) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India :: VAT Audit :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: form 3cd :: empanelment :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: due date for vat payment :: ACCOUNTING STANDARD :: ACCOUNTING STANDARDS :: list of goods taxed at 4%
 
 
From the Courts »
 Nishant Construction Pvt. Ltd vs. ACIT (ITAT Ahmedabad)
 Flipkart India Private Limited vs. ACIT (Karnataka High Court)
 JSW Steel Ltd vs. ACIT (ITAT Mumbai)
  CIT vs. Uday M. Ghare (Bombay High Court)
 Ajay Enterprises Pvt. Ltd. Vs. Assistant Commissioner Of Income Tax (Tds) And Ors.
 Rakesh Raj And Associates Vs. Commissioner Of Income Tax, Central-Ii & Anr.
 Venu Charitable Society And Anr. Vs. Director General Of Income Tax
 Wadhwa Estate & Developers India Pvt. Ltd vs. ACIT (ITAT Mumbai)
 CIT vs. Uday M. Ghare (Bombay High Court)
  Ajay Enterprises Pvt. Ltd. Vs. Assistant Commissioner Of Income Tax (Tds) And Ors.
 Anita D Kanjani vs. ACIT (ITAT Mumbai)

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 2017 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