Case Law Details
District Co-operative Central Bank Vs. ITO (ITAT Visakhapatnam)
In the case of Verizon Data Services India Pvt. Ltd. (supra) the coordinate bench of Madras held that payment made to gratuity fund maintained with LIC has no control over the irrevocable trust created exclusively for the benefit of employees and deduction shall be allowed. The coordinate bench of Madras while deciding the appeal relied on the decision of Hon’ble Madras High court in the case of Textool India Pvt. Limited (supra) (civil appeal No. 447 of 2003).
In the instant case the assessee has made the payments to the LIC towards group gratuity scheme directly in approved schemes. The assessee has also obtained the policy in favor of the bank. The assessee has no control over the funds contributed to LIC towards the gratuity. The assessee is receiving the gratuity payment directly from the LIC of India as per the scheme which is paid to the employee on happening of the event i.e. retirement or death or resignation. Therefore, the facts of the assessee’s case are squarely covered by the decisions cited supra. The coordinate bench of Hyderabad while delivering the ruling relied on the decision of jurisdictional High Court in the case of Warner Hindustan Ltd. Since the facts are identical, respectfully following the view taken by the coordinate benches, we hold that the assessee is entitled for the deduction for payment of gratuity to LIC and accordingly, we set aside the order of the lower authorities and allow the appeal of the assessee.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
These cross appeals filed by the assessee as well as the revenue are directed against orders of the Commissioner of Income Tax (Appeals) {CIT(A)}, Visakhapatnam vide ITA No. 196 & 197/ITO, Ward- 2/Eluru/10-11/11-12 dated 30.11.2011, ITA No. 0059/13-14/1111/ACIT,C-1,Eluru/2014-15 dated 26.3.2015, ITA No. 309/CIT(A)/GNT/11-12 dated 9.10.2012, ITA No. 11/2009-10/ACIT,C- 1 Elr/2014-15 dated. 1.7.2014 & ITA No. 0011/13-14/ACIT, C-1, Eluru/2014-15 dated 30.7.2014 for the assessment years 2007-08 to 2011-12. Since, the facts are identical and issues are common, they are clubbed, heard together and disposed-off by way of this common order for the sake of convenience.
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