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TMI Blog2013 (10) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank Ltd. [2002 (11) TMI 29 - KERALA High Court] - Decided in favour assessee. Disallowance of pension paid - Held that:- if the amount received from the pension fund is credited to the profit & loss account of the taxpayer and then the taxpayer makes the payment to the retired employees as pension, then there may not be any duplication at all. But it has to be verified whether the amount received from the pension fund is credited in the profit & loss account or not. It also needs to be examined whether any payment is made to the retired employees from the pension fund directly. If no payment is made from the pension fund directly and the entire amount received from the pension fund is credited in the profit & loss account and then the taxpayer makes the payment to its retired employees by debiting the same in the profit & loss account, then the amount paid by the taxpayer as pension has to be allowed as deduction in view of the contractual obligation to pay the pension - Decided in favor of assessee. - I.T.A. Nos. 479 & 480/Coch/2011 - - - Dated:- 12-6-2013 - Shri N. R. S. Ganesan, JM And B. R. Baskaran, AM,JJ. For the Petitioner : Shri Mohan Pulickal, Adv. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istinct claims. He further submitted that the pension fund was created after an agreement was reached with the Employees' Unions and accordingly, the assessee has transferred funds to the Pension Fund every year and claimed the same u/s 36(1)(vi) of the Act. However, the corpus of the Pension fund was not sufficient enough to meet the pension expenditure liability of the assessee and hence, it was constrained to make pension payments directly to the retired employees, which is allowable u/s 37 of the Act. He submitted that the direct pension payments cannot be claimed u/s 36(1)(vi) of the Act. The Ld. Counsel for the assessee further placed reliance on the decision dated 12th October, 2012 rendered by this bench of Tribunal in the case of Dhanalakshmi Bank in I.T.A. Nos. 186-189/Coch/2011 relating to the assessment years 2000-2001 to 2003-04 and submitted that the Tribunal considered an identical issue in the above said case and has set aside the matter to the file of the Assessing Officer with a direction to examine claim of the assessee afresh. He further submitted that the Tribunal has observed that the pension paid to the retired employees has to be allowed as deduction in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion fund is credited in the profit loss account or not. It also needs to be examined whether any payment is made to the retired employees from the pension fund directly. If no payment is made from the pension fund directly and the entire amount received from the pension fund is credited in the profit loss account and then the taxpayer makes the payment to its retired employees by debiting the same in the profit loss account, then the amount paid by the taxpayer as pension has to be allowed as deduction in view of the contractual obligation to pay the pension. Since these facts were not examined by the lower authority, this Tribunal is of the considered opinion that the matter needs to be examined as to whether the amount received from the pension fund is credited in the profit loss account and whether the pension fund authorities have made any payment directly to the retired employees. Accordingly, the orders of the lower authorities are set aside and the entire matter is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the same in the light of observations made by this Tribunal and thereafter decide the same after giving reasonabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed as deduction. 5. In the case before us, the taxing authority disallowed the claim of the taxpayer on the ground that the balance-sheet of the respective companies was not filed to establish the valuation. The contention of the taxpayer is that the valuation was made on the basis of the guideline issued by RBI taking into consideration the realisable value. In fact, as seen from the order of the Commissioner of Income-tax(A), the taxpayer claimed that the revaluation was made on the basis of the guideline issued by the RBI and the value is based on realisable value. The taxpayer has also brought to the notice of the lower authorities that in spite of their best effort, they could not get the copies of the balance-sheet from the respective company. Admittedly, the assessing authority has not suggested any formula for valuation of the unquoted shares. On identical situation the Kerala High Court in the case of Lord Krishna Bank Ltd. (supra)(ITA No.234 of 2009 dated 07-10-2010) examined the issue in the light of the law laid down by the Kerala High Court in Nedungadi Bank Ltd. (supra) and observed as follows ".....It is a settled position through various decisions including th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing the judgment of the Kerala High Court in the case of Nedungadi Bank Ltd. (supra) and Lord Krishna Bank Ltd. (supra) and for the reasons stated therein the orders of the lower authorities are set aside and the assessing authority is directed to allow the notional loss claimed by the taxpayer on revaluation of the securities as deduction while computing the total income". Consistent with the view taken by the Tribunal in the assessee's own case in the earlier years, we direct the Assessing Officer to delete the impugned disallowance and accordingly the order of Ld CIT(A) is set aside on this issue. 9. The next issue relates to the validity of interest charged u/s. 220(2) of the Act. We notice that the issue relating to the chargeability of interest u/s. 220(2) of the Act has since been settled by the Hon'ble Supreme Court in the case of Vikrant Tyres vs. First ITO (247 ITR 821) (SC). We also notice that the tax authorities have not examined this issue in the light of the decision rendered by the Hon'ble Supreme Court in the above cited case. Accordingly, in our view, this issue needs fresh examination. Accordingly, we set aside the order of the Ld. CIT(A) on this issue and r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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