Case Law Details
True that a fiscal statute is to be construed strictly and nothing should be added or subtracted to the language employed in the Section, yet a strict construction of a provision does not rule out the application of the principles of reasonable construction to give effect to the purpose and intention of any particular provision of the Act. (See : Shri Sajjan Mills Ltd. vs. Commissioner of Income Tax, M.P. & Anr. (1985) 156 ITR 585). From a bare reading of Sectin 36(1) (v) of the Act, it is manifest that the real intention behind the provision is that the employer should not have any control over the funds of the irrevocable trust created exclusively for the benefit of the employees. In the instant case, it is evident from the findings recorded by the Commissioner and affirmed by the Tribunal 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 Textool Employees Gratuity Fund, approved by the Commissioner with effect from the following previous year.Thus, the conditions stipulated in Section 36(1) (v) of the Act were satisfied. Having regard to the facts found by the Commissioner and affirmed by the Tribunal, no fault can be found with the opinion expressed by the High court, warranting our interference.
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 447 OF 2003
Commner. of Income Tax, Coimbatore
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1. Consultancy for Formation of a New Approved Irrevocable Gratuity Trust,
2. Consultancy for Gratuity Trust Deed, Trust Rules, Applications required for Approval of Trust,
3. Consultancy for Approvals of Trust in terms of Part C of Schedule IV from Income Tax Department in following cases :-
a. Approvals for New Gratuity Trust or Group Gratuity Scheme
b. Approvals for Change in Trust Deed
c. Approvals for Change in Trust Rules
d. Approvals for Change in Object of Trust
e. Approvals for Change in Trustees
f. Approvals for winding up of Trust due to winding up of the Company
g. Approvals for amalgamation with another fund due to merger/acquisition of the Companies
4. Consultancy for Investment of Trust Money in Group Gratuity Schemes of Insurers.
a. Traditional Group Gratuity Schemes of LIC
b. Unit Linked Gratuity Schemes of Insurance Companies
5. Consultancy for Investment of Trust Money as per Income Tax Rules 1962..
6. Consultancy for Litigation Issues related to Payment of Gratuity,
7. Support Services for Actuarial Valuations required by Companies under Gratuity plan in compliance of AS 15 (Rev. 2005), IndAS 19, IAS 19-IFRS & USGAAP
8. Support Services for Fair Value Valuations of Trust funds of Companies in compliance of IndAS-113, IndAS-36, IndAS-103, IndAS-109 IndAS-28, IndAS-38, IndAS-102 & IndAS-16.
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It means that thought the amount is disallowable u/s 40A(7), deduction could be claimed u/s 36(1)(v).