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TMI Blog2019 (5) TMI 1979X X X X Extracts X X X X X X X X Extracts X X X X ..... not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. As the employer bank does not have any control over the funds of the irrevocable trust created exclusively for the benefit of the employees and that the assessee had absolutely no control over the fund created by the LIC for the benefit of the employees of the assessee and further all the contribution made by the assessee in the said fund ultimately came back to the Bank Employees Gratuity Fund. The assessee has also obtained the policy in favour of the bank - thus we hold that the assessee is entitled for deduction for payment of gratuity scheme to LIC. Non disclosure of income from interest from Bank - HELD THAT:- We observe that the AO has asked the assessee vide order sheet noting to produce reconciliation of all income with its corresponding TDS. However, the assessee has only submitted details of interest receivables in which amount of Rs.12,12,500 from Union Bank of India and Rs. 20,14,546 was not reflected. Accordingly, the AO made addition of above sums and allowed credit of TDS deducted at Rs. 5,24,159. CIT (A), the appellant has failed to furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the said agreement under the Group Gratuity-cum Life Insurance Scheme Only after the Approval of the Commissioner of Income Tax had been obtained. This is evident from column 4 of the said agreement which inter-alia contains Yes under Part C for the 4th Schedule of Income Tax. The Group Gratuity premium paid by the assessee is in fact the recognized Group Gratuity-cum Life Insurance Scheme. It was further submitted that this is not the 1st year in which the premium under the deduction has been paid by the bank, but the bank has paid the premium under the scheme year to year since 1976, which is duly recorded in the audited books of accounts and the scheme has rightly been allowed by the Department in the past, even while framing the assessment under section 143 of (3)/148 of the Act. Therefore, for the above genuine and bona fide reason, the appellant bank has claimed the expenditure under section 37 (1) of the Act. However, the AO observed that the matter has been considered carefully and it is clearly mentioned in section 36(1)(v) that any sum paid by the assessee as an employer by way of contribution towards an approval gratuity fund created by him for the exclusive benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al before the Tribunal. The learned counsel for the assessee submitted that the appellant bank had entered in to the Employees Group Gratuity-cum Life Insurance Scheme on behalf of Valsad District Cooperative Bank Employees Group Gratuity Fund created under irrecoverable trust for the exclusive benefit of the employees of the assessee bank under the policy issued by the LIC and much less, the annual contributions/premium has been paid towards the approved gratuity fund created and maintain consistently with LIC in the fulfilment of the conditions laid down under part C to IV Schedule of the Income Tax Act,1961, since 1976 and the Revenue officers has been consistently allowed the expenditure towards the annual premium paid year to year on the actuarial valuation of Gratuity Fund as trading liability made by the LIC under that the schemes under section 36(1)(v) of the Act. The learned counsel for the assessee referred Paper Book Page No. 19 to 36, which a Copy of Original Master policy issued by the LIC, bearing Master Policy No. GGI/16073 dated 14.12.1976 of Valsad Jilla Sahakari Bank Ltd. Group Gratuity-cum Life Insurance Scheme. This Group Gratuity-cum Life Insurance Scheme is be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support of this contention. The learned counsel for the assessee further supported his view by placing reliance in the case of CIT v. Textool Co. Ltd. [2013] 35 taxmann.com 639 (SC) and other as per his written submissions placed on records. 6. On the other hand, the ld. Sr. D.R. vehemently supported the order of lower authorities and submitted that res-judicata does not apply to the income tax proceeding. It was contended that the assessee has failed to produce the approval granted by the CIT for approval hence, contribution made towards approved Gratuity Fund is not allowed as deduction under section 36(1)(v) of the Act. 7. We have heard the rival submissions and perused the relevant material on record. We find that the AO has disallowed a sum of Rs. 16,18,050 towards gratuity expenses being claim of the assessee on the ground that the gratuity scheme was not approved as per the requirement of section 36(1)(v) of the Act and the assessee has failed to produce necessary certificate in support of the same. However, it is seen that the Gratuity scheme was being managed by the LIC for which an agreement was entered in to between the trustees of the fund and LIC on 31.03.1976 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrutiny. It is just because the assessee is not able to prove the copy of the approval, the claim has been denied to the assessee. We are of the view that this claim of the assessee is allowable on the plea of consistency. The Hon`ble Supreme Court in the case of Radhasaomi Satsang Saomi Bagh vs. CIT (1992) 193 ITR 321(SC) held that the assessments are quasi-judicial and each assessment year being a unit, what is decided in one year may not apply in the following year , but where a fundamental aspect permeating through the different A.Y. s has been found as a fact one way or the other and the parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. The Hon`ble Supreme Court in the case of CIT v. Textool Co. Ltd. [2013] 35 taxmann.com 639 (SC) observed as 7. Learned counsel appearing on behalf of the Revenue has submitted before us that the provisions of Section 36(1) (v) of the Act have to be construed strictly and for claiming deduction, conditions laid down in Section 36(1) (v) of the Act must be fulfilled. It is urged that since during the relevant previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit of the employees and that the assessee had absolutely no control over the fund created by the LIC for the benefit of the employees of the assessee and further all the contribution made by the assessee in the said fund ultimately came back to the Bank Employees Gratuity Fund. The assessee has also obtained the policy in favour of the bank. Therefore, the facts of the case of the assessee are squarely covered by the above decisions cited (supra). Therefore, respectfully following the ratio laid down by various High Court as well as Hon`ble Supreme Court and Co-ordinate Bench as discussed above, we hold that the assessee is entitled for deduction for payment of gratuity scheme to LIC accordingly, we allow this ground No. 3 of appeal of the assessee. 9. Ground no. 1 2 relates to confirming the action of DCIT Valsad Circle Valsad in assuming jurisdiction u/s.147 of the Act and issuance of notice under section 148 of the Act of the Act. 10. Since, we have decided the Ground No. 3 for this assessment year in above paras of this order in favour of the assessee, these grounds of appeal becomes academic in nature, hence, not required our specific adjudication. 11. In the resu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee has only submitted details of interest receivables in which amount of Rs.12,12,500 from Union Bank of India and Rs. 20, 14,546 was not reflected. Accordingly, the AO made addition of above sums and allowed credit of TDS deducted at Rs. 5,24,159. 17. Being aggrieved, the assessee filed an appeal before the ld. CIT (A). Wherein it was contended that the assessee has recorded interest income net of TDS in books of accounts received from both banks. Therefore, only portion of TDS of Rs. 5,24,159 should be added to total income and not entire interest amount. However, Ld. CIT (A) observed that the AO has given ample opportunities to the appellant to reconcile the amount of interest earned vis- -vis the TDS deducted and the amount offered for taxation. The AO has clearly brought out that the appellant has neither taken credit of TDS of Rs.5,24,159 nor the amount of interest of Rs.32,27,046 for taxation. Even before him in appellate proceedings only explanation has been given without any evidence of reconciliation. In view of this, the addition made by the AO was confirmed. 18. Being, aggrieved the assessee filed this appeal before the Tribunal. The learned counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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