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TMI Blog2013 (8) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... d an application before CIT for such approval on 12.4.2002. - unless there was strict compliance to Section 40A(7), an assessee could not claim for relief any amount or payment of premium to M/s LIC for any Group Gratuity Scheme - conditions mentioned in Section 36(1)(v) was held to be satisfied since the funds ultimately came back to a Gratuity Fund had the approval of the Commissioner. Here, the fate of the application of the assessee for approval is not known - If the assessee is able to produce the approval for Gratuity scheme, no doubt, it can claim deduction under Section 36(1)(v) of the Act and will not be fettered by constraints placed under Section 40A(7) of the Act - Decided in favour of assessee. Deduction u/s 10B - CIT disallowed deduction - Held that:- if the assessee is able to produce FIRC for whole of the receipts on account of export proceeds, it will be unfair to deny the claim made by it under Section 10B of the Act - Following decision of CIT v. Yokogawa India Ltd. [2011 (8) TMI 845 - Karnataka High Court] - Decided in favour of assessee. Depreciation on fixed asset - Relevant bills not produced - Held that:- assessee was unable to file any evidence in sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Directors had misled its parent company in United Kingdom regarding it working as well as tax liabilities. The said Directors had projected huge tax liabilities exceeding GBP of 1,50,000/-. Due to such employee Directors, who were not working in the best interest of the firm, assessee was obviously unable to file the appeals in time. In our opinion, the reasons cited are justified. The delay is condoned and appeals are admitted. 5. Appeal for assessment year 2004-05 is taken up first for disposal. Assessee has raised four grounds of which, Ground No.1 is general needing no adjudication. 6. Vide its ground No.2, grievance raised by the assessee is that a disallowance of preliminary expenditure of 34,40,902/- made by the Assessing Officer, was confirmed by the CIT(Appeals). 7. Facts apropos are that assessee, engaged in development of computer software for educational purposes, had filed its return for impugned assessment year declaring a loss of Rs. 3,07,805/-. During the course of assessment proceedings, it was noted by the Assessing Officer that assessee had incurred expenditure of Rs. 1,03,22,709/- towards initial setting up and training of personnel for a new unit in Triv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed on the ground that such Gratuity fund was not approved. 14. Facts apropos are that assessee had paid premium to LIC towards Group Gratuity Fund. As per the A.O., only payment effected to approved Gratuity Fund could be allowed under Section 36(1)(v) of Income-tax Act, 1961 (in short 'the Act'). Here the payments were effected to LIC for a fund which was not having approval of CIT/CCIT. For this reason, relying on the decision of Hon'ble jurisdictional High Court in the case of CIT v. Coimbatore Premier Corporation (P) Ltd. (246 ITR 626), A.O. disallowed the claim of the assessee. 15. Ld. CIT(Appeals) upheld the order of the A.O. 16. Now before us, learned A.R., strongly assailing the orders of authorities below, submitted that assessee had filed before CIT(Appeals) an application for approval of Gratuity scheme on 12.4.2002. According to her, the said application was still to be disposed of. Without disposing of such application, lower authorities fell in error in holding that approval for the Gratuity Fund was not sought or obtained by the assessee. Reliance was placed on the decision of Hon'ble Apex Court in the case of CIT v. Textool Co. Ltd. [2009 STPL(Web) 176 SC] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d ultimately came back to the Textool Employees Gratuity Fund, approved by the Commissioner with effect from the following previous year. Thus, the conditions stipulated in Section 36(1)(v) of the Act were satisfied. Having regard to the facts found by the Commissioner and affirmed by the Tribunal, no fault can be found with the opinion expressed by the High Court, warranting our interference." It is clear that the conditions mentioned in Section 36(1)(v) was held to be satisfied since the funds ultimately came back to a Gratuity Fund had the approval of the Commissioner. Here, the fate of the application of the assessee for approval is not known. We are, therefore, of the opinion that the matter requires a revisit by the Assessing Officer. If the assessee is able to produce the approval for Gratuity scheme, no doubt, it can claim deduction under Section 36(1)(v) of the Act and will not be fettered by constraints placed under Section 40A(7) of the Act. We, therefore, set aside the orders of authorities below and remit this issue back to the file of the A.O. for his consideration in accordance with law. 19. Ground No.3 of the assessee is allowed for statistical purposes. 20. V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat assessee should have set off the loss of its unit in Chennai against the profits of its unit in Trivandrum before claiming deduction under Section 10B is, in our opinion, not justified in view of the decision of Hon'ble Karnataka High Court in the case of CIT v. Yokogawa India Ltd. (341 ITR 385). Further, in our opinion, if the assessee is able to produce FIRC for whole of the receipts on account of export proceeds, it will be unfair to deny the claim made by it under Section 10B of the Act. In the fitness of the things, we are of the opinion that the matter requires a fresh look by the Assessing Officer. We set aside the orders of authorities below and remit the issue back to the file of the A.O. for fresh consideration. If the assessee is able to produce FIRC in support of export proceeds realized by it, then such claim has to be allowed. 26. Ground No.4 of the assessee is allowed for statistical purposes. 27. Now we take up appeal of the assessee for assessment year 2005-06. 28. Ground No.1 is general needing no adjudication. 29. When Ground No.2 was taken up, learned A.R. submitted that she was not pressing such ground. Hence this ground is dismissed as not pressed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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