Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (10) TMI 1505 - ITAT BANGALOREHarmonious construction of section 43B and section 40A(7)(b) of the Act - Deduction of contribution to gratuity fund - deduction on the basis of payment / deposit in cash - approved gratuity fund or not - HELD THAT:- Kerala High Court has held that, section 40A(7), clause (b) sub-clause (i) thereof is a special provision to claim for deduction based on a provision made for payment towards an approved gratuity fund. Referring to various decisions of Supreme Court stated that there is no clear inconsistency between the two provisions. Section 40A(7) is in negative terms and section 43B is in positive terms, the effect of both provisions is that to claim deduction in respect of payment to a gratuity fund there must be actual payment and that deduction cannot be allowed on the basis of any provision. The only exception to the above rule is with regard to the provision for payment to an approved gratuity fund. It cannot be interpreted that the later provision in section 43B by introducing the non-obstante clause would abrogate the special provision with regard to the provision made for payment to an approved gratuity fund contained in section 40A(7)(b)(i). This is all the more so since no patent conflict or inconsistency can be spelt out. Both the provisions can co-exist. A harmonious construction of the aforesaid two provisions would clearly indicate that the Legislature never intended to take away the benefit conferred under clause (b) of section 40A(7) by the provisions of section 43B(b) of the Act. The A.O. is directed to allow the assessee's claim of provision for gratuity after verifying whether the provision made by the assessee is to an approved gratuity fund or not. In case the said gratuity is approved then the provision is to be allowed. In the event the said gratuity fund is not an approved one, then as per the proviso’s to section 43B of the Act, deduction is to be allowed to the extent of actual payments towards gratuity up to the due date for filing the return of income u/s.139(1) Decision in the case COMMISSIONER OF INCOME-TAX VERSUS COMMON WEALTH TRUST (P.) LTD [2004 (4) TMI 51 - KERALA HIGH COURT] followed. Deduction u/s 80IA - calculating the deduction - the carry forward of losses of other eligible units to be considered or not - HELD THAT:- For the purpose of computation of gross total income, the losses of other units are to be taken into account. However for the purposes of calculating the deduction of an eligible unit / undertaking u/s.80-IA of the Act, the loss sustained in another unit / undertaking cannot be taken into account and it is only the profit that shall be taken into account as if it was the only source of income of that unit. Following the decision in the case of Synco Industries Ltd [2008 (3) TMI 13 - SUPREME COURT], held that, the assessee has to compute the claim of deduction of each eligible unit / undertaking, as if it is the only source of income from such eligible undertaking and without any setting off of unadjusted brought forward losses of other eligible undertakings. We find from the record that the computation of the eligible deduction u/s.80-IA of the Act by the assessee is in accordance with the procedure laid down and is therefore entitled to claim and be allowed deduction u/s.80-IA. Applicability of provisions of section 115JB of the Act - HELD THAT:- the provisions of section 115JB of the Act are not applicable to the assessee which is an electric company in the business of generation of power. In this view of the matter, the additional grounds of appeal raised by the assessee on the non-applicability of the provisions of section 115JB of the Act is allowed. Decision in the case SYNDICATE BANK VERSUS THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1, UDUPI [2015 (4) TMI 727 - ITAT BANGALORE] followed. In the result, the assessee's appeal is partly allowed.
|