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TMI Blog2014 (8) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... nized fund, the assessee is entitled to get the benefit for the contributions made to the said fund. Reimbursement of free passes - assessee is crediting the amounts received from the Government on account of issuance of passes in the year of receipt - objection raised by the Revenue is that, since the assessee is following mercantile system of accounting, the assessee should offer to tax, reimbursement amount in the year of claim itself - HELD THAT:- A perusal of the records does not make it clear, whether the assessee is issuing free passes as per the scheme of Department of Social Welfare, Government of Tamil Nadu or Welfare Scheme formulated by its own and is thereafter claiming reimbursement from the Social Welfare Department. The moot point which has to be looked into for including the income in tax net is, When does the income crystalises ? In case the assessee is issuing free passes to physically handicapped, freedom fighters etc., under the scheme of Government, the assessee is assured to get the reimbursement of the amount on the issuance of passes itself. In case the claim of the assessee is subject to scrutiny by Social Welfare Department, the income crystalises a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und which has been and continues to be recognized by the Chief Commissioner or Commissioner in accordance with the rules contained in part A of the Fourth Schedule . As per part-A of the fourth schedule, the employer is required to make an application for recognition to the CIT/CCIT having jurisdiction over him and obtain recognition. In this case the assessee was liable to apply for and obtain recognition from the CIT, Salem/CCIT, Trichy. However, no such application is made and thereby recognition not obtained as provided by the law. Consequently, the Provident Fund to which the assessee company has made the contribution remains un-recognized by the competent authorities. Thereby, the contribution of ₹ 15,59,87,294/- made by the assessee to the Tamil Nadu State Transport Corporation Employees Pension Fund Trust, Chennai cannot be claimed as deduction u/s.36(1)(iv). Thus, the non-disallowance of an amount of ₹ 9,79,42,302 [₹ 15,59,87,294 ₹ 5,80,44,992] by the Assessing Officer at the time of framing the assessment was erroneous. II. REIMBURSEMENT RECEIVABLE TOWARDS FREE PASSES: In Page No.64 of the Annual Report under Schedule-X, being Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oration Employees Pension Fund Trust, Chennai is recognized by the CIT-VII, Chennai. The said fund has been set up for all the employees of the Tamil Nadu State Transport Corporation providing services in various districts of the state of Tamil Nadu. The ld.Counsel placed on record a copy of the Trust Deed dt.16-12-2000, wherein, all the twelve State Transport Corporations operating in different district of the State are signatories to the Trust. The ld.Counsel further submitted that there is no need to form separate trust in every district as contributions are made to common trust, duly recognized by the CIT. In order to support his contentions, the ld.Counsel for the assessee draw support from the decision of co-ordinate bench of the Tribunal in the case of Stanmore (Anamallay) Estates Ltd., Vs. ITO reported as 1 ITD (Mad) 519. On the issue of reimbursement of free passes, the ld.Counsel submitted that the assessee is issuing free passes to physically handicapped, freedom fighters etc. Thereafter, it is filing claim for reimbursement before the Department of Social Welfare. In the year of receipt of reimbursements, the assessee is offering the amount for tax. Though, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontributed by the employer towards a recognized provident fund or approved superannuation funds subject to such limits as may be prescribed for recognizing provident fund or approving the superannuation fund. The section does not lay down any specific condition that the fund should be approved by the jurisdictional Commissioner or Chief Commissioner only. In the present case, the assessee is contributing in the Pension Fund Scheme jointly floated by twelve State Transport Corporations operating in different districts of the state of Tamil Nadu. All the State Transport Corporations are signatories to the Trust Deed for setting up of joint State Transport Employees Pension Fund Scheme. It is not in dispute that the said fund has been recognized by the CIT-VII, Chennai. Once the assessee is contributing towards recognized fund, the assessee is entitled to get the benefit for the contributions made to the said fund. 7. The case of the assessee is supported by the decision of the co-ordinate bench of the Tribunal in the case of Stanmore (Anamallay) Estates Ltd., Vs. ITO (supra). In the said case, the assessee-company along with other four sister companies created a joint gratuity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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