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TMI Blog2019 (7) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeals by the Revenue and the Cross Objections by the assessee are directed against the common order of Commissioner of Income Tax (Appeals), Rajamahendravaram, dated 26/12/2018 for the Assessment Years 2014-15 2015-16. Since facts and issue are common, clubbed and heard together and disposed of by way of this consolidated order for the sake of convenience. 2. There is a delay of 12 days in filing of both the appeals. The Revenue has filed the affidavits for condonation of delay. We find that there is a sufficient cause for non-filing the appeals in time, therefore we condone the delay in filing the appeals. 3. The Revenue has raised the following grounds of appeal in ITA No.166/VIZ/2019:- 1) The order of the Ld. CIT(A), Rajahmundry is erroneous in law or facts or both. 2) The CIT(A) erred in observing that since the payments were actually made and genuine and the same are to be allowed, without appreciating the fact that, the contributions to [IC, though stated to be on actuarial basis, do not enable the assessee to claim deduction of payments made to LIC since the same is not in accordan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted regarding non-allowability of the amount paid towards the gratuity fund set up with LIC of India. In view of the above, it is clear that the provisions of the aforesaid two sections state that no deduction is allowable for contribution made to an unapproved fund . Accordingly, the Assessing Officer disallowed the payment of ₹ 50.00 lakhs towards gratuity fund and added the same to the total income of the assessee. 5. On appeal before the ld. CIT(A), the assessee has submitted that the payments made by the assessee towards employees gratuity fund is to meet its annual gratuity liability commitments of its employees and incompliance with the mandatory accounting standards of CBDT. He placed reliance on the decision of the ITAT, Visakhapatnam Bench in assessee s own case for the A.Ys. 2007-08 to 2009-10 and submitted that claim made by the assessee may be allowed. The ld. CIT(A) by considering the submissions made by the assessee and also by following the decision of the ITAT, Visakhapatnam Bench in assessee s own case, directed the Assessing Officer to allow the amounts paid by the assessee towards employees gratuity contribution. For the sake of convenien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before this Tribunal. 7. At the very outset, ld. counsel for the assessee has submitted that this issue is squarely covered by the decision of the coordinate bench of this tribunal in assessee s own case and requested that same may be followed. 8. On the other hand, ld. Departmental Representative relied on the grounds of appeal. 9. The issue involved in this appeal relates to contribution paid by the assessee to the LIC of India towards group gratuity. The very same issue came up before the Tribunal for the Assessment Years 2007-08 2008-09 in assessee s own case in ITA Nos.49 50/VIZ/2012, wherein the Tribunal has held that the group gratuity premium paid to the LIC of India is allowable and accordingly allowed the assessee s appeals. For the sake of convenience, the relevant portion of the order is extracted as under:- 8. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The assessee is a cooperative bank and created the group gratuity fund/trust of the District Co-operative Central Bank Employees but the same was not yet approved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of the assessee and against the Revenue in I.T.A. No. 198/Hyd/2011 in assessee's own case for A.Y. 2006-07 order dated 16.12.2011 wherein this Tribunal held as follows: 3. After hearing both the parties, we are of the opinion that similar issue came up for consideration in assessee's own case for assessment year 2002-03 in I.T.A. No. 349/Hyd/2006. The Tribunal decided the issue in favour of the assessee vide its order dated 15.2.2008 by holding as follows: 4. We have considered rival submissions on either side and also perused the material available on record. Admittedly, the Group Gratuity Scheme was not recognised by the Commissioner of Income-tax. This fact is not in dispute. We have carefully gone through the provisions of sec. 36(1)(v) of the Income-tax Ac. Sec. 36(1)(v) reads as follows: 36. (1) The deductions provided for in the following clauses shall be allow d in respect of the matters dealt with therein, in computing the income referred to in section 28 (v) any sum paid by the assessee as an employer by way of contribution towards an approved gratuity fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of M/s. Sri Krishna Drugs Ltd. (supra), respectfully following the same, we set aside the order of the CIT(A) and allow the ground of appeal of the assessee. 9. Similarly, ITAT Ahmedabad Bench in the case of Baroda Gujarat Grameen Bank cited (supra) held that the payment made to LIC of India is not a provision but it is actual expenditure claimed under the gratuity contribution. Hon ble ITAT Ahmedabad Bench held that since assessee has not claimed the provision and claimed on actual basis, the expenditure is allowable deduction. For ready reference, we reproduce para Nos.4 5 of the order of the Hon ble ITAT Ahmedabad Bench which reads as under: 4. We have considered the rival submissions and material available on record. Section 40A (7) of the IT Act provides that subject to provision of clause (b), no deduction shall be allowed in respect of any provision made by the assessee for payment of gratuity to his employer on their retirement or on termination of their employment for any reason. It is clear from the above provision that section 40A (7) of the IT Act would apply in respect of the provision only. However, in the case of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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