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TMI Blog1982 (4) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... ion fund in January, 1970 which was vested in Trust created by Trust Deed and superannuation fund since stands approved by the CIT vide order dt.17th Dec., 1971but made effective from1st Jan., 1970. During the previous year relevant to assessment year under appeal, the assessee made initial of Rs. 2,93,009 to the said fund but the ITO disallowed the claim on the ground that the initial contribution is not allowable. The CIT(A) held that under s. 36(1)(Iv) of the Act r/w r.88, IT Rules, 1962, the initial contribution towards superannuation fund is allowable subject to limits as may be prescribed and subject to conditions as may be specified by the CBDT and accordingly he held that in view of Notification-S.O. No. 3433 dt. 21st Oct., 1965 the assessee was entitled to deduction of 80 per cent of the initial contribution made by the assessee towards the said fund subject to conditions that the said 80 per cent of the total initial contribution was allowable during 5 assessment years and in that view of the matter, the total initial contribution being Rs. 2,93,009, 80 per cent of the said contribution worked out to Rs. 2,34,407 and the CIT(A) allowed relief to the assessee at Rs. 46,881 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 of the order of the Tribunal made in the case of M/s Amar Dye-Chem. Ltd., Bombay vs. ITO, Company Circle-II(3), Bombay, which orders are dt.1st Dec., 1977and were made by the Special Bench of the ITAT, Bombay Bench 'B' in ITA No. 3643 (Bom) of 1974-75. As per Para 17 of the order of the Tribunal, their Lordships of the Hon'ble Supreme Court of India in the case of M/s Kanpur Vanaspathi Stores vs. Commr, ST AIR 1972 SC 2373 held as under: "Further it is now settled by the decision of this court that none can challenge the validity of a provision of an Act or rule made thereunder or even a notification issued either under the Act or under the Rules made before the authorities constituted under the Act." 7. Notification No. S.O. 3433 dt.21st Oct., 1965which is agitated upon by the assessee before us, reads the under: "146. Conditions specified by the Board under which relief on special lump sum contribution and/or initial contribution to be regulated-s. 36(1)(iv). In exercise of the powers conferred by cl. (iv) of sub-s. (1) of s. 36, the Central Board of Direct Taxes hereby specifies the following conditions for the deduction of contributions, not being annual contributions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omputing the income of the assessee under s. 28 of the Act subject to such limit as may be prescribed for the purpose of approving superannuation fund and subject to such condition as the Board may think fit to specify in cases where the contributions are not in the nature of annual contribution of fixed amounts or annual contributions fixed on some definite basis by reference to the income chargeable under the head "Salaries" or to the contributions or number of members of the fund. 10. Since, Notification No. S.O. 3433 dt. 21st Oct., 1965 has been issued by the Board under s. 36(1)(Iv) of the Act, in view of the ratio laid down by their Lordships of the Hon'ble Supreme Court of India in the case of M/s Kanpur Vanaspathi Stores; the said notification cannot be challenged before this forum viz. The Tribunal, and in that view of the matter, this contention of the assessee stands rejected. 11. Again, statutory r.88, IT Rules, 1962 which deals with topics "initial contribution" reads as under: Subject to any condition which the Board may think fit to specify under cl. (iv) of sub-s. (1) of s. 36, the amount to be allowed as a deduction on account of an initial contribution which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onnection with the raising of the capital has to be treated as capital expenditure and cannot be allowed as deduction. He further reasoned that expenses were not in the nature of revenue expenditure. 15. Before us, for the assessee, it has been contended that the expenses are in the nature of revenue one and are allowable as deduction dehors the treatment given by the assessee in his books of accounts viz. Entry in the books of accounts. The assessee has further contended that the treatment of an entry is not conclusive and cannot be considered for making of allowance or disallowance as deduction, since according to the assessee, the expenditure expended and subject matter of appeal were in the nature of revenue one, having been incurred for the purpose of the assessee's business. The assessee further reasoned that there has been rationalisation of balance sheet, further that there has been realignment of assets and no fresh capital has been raised. For the assessee strong reliance has been placed on the ratio of the decision of the Hon'ble Madras High Court in the case of CIT v. Kisenchand Chellaram (India) (P.) Ltd. [1981] 130 ITR 385 and further that of the Hon'ble Calcutta Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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