PCIT Vs Syama Prasad Mookherjee Port Kolkata (Calcutta High Court)
Summary: The Calcutta High Court considered a Revenue appeal under Section 260A of the Income Tax Act, 1961 against the ITAT Kolkata order dated 18.11.2024 for AY 2018-19 in the case of Syama Prasad Mookherjee Port Kolkata, formerly known as Kolkata Port Trust. The assessee had filed its original return on 27.09.2018 and revised return on 28.03.2019. Assessment under Section 143(3) read with Section 144B was completed on 24.09.2021 at total income of Rs.876,16,93,450, including disallowances of Rs.710,68,55,297 towards Superannuation Fund contributions, Rs.33,11,01,366 towards approved Gratuity Fund contributions and Rs.8,38,35,219 towards alleged belated employees’ PF/ESI contributions under Section 36(1)(va). The CIT(A) deleted the additions and the ITAT confirmed that decision.
On the Superannuation Fund issue, the Assessing Officer had applied the 27% ceiling under Rule 87 of the Income-tax Rules, 1962. Salary for the relevant computation was Rs.446,33,18,867 and the AO calculated the permissible contribution at Rs.120,50,96,094, whereas the assessee had debited Rs.831,20,51,391 to its Profit & Loss account. The assessee explained that the payment was necessitated by a severe actuarial deficit caused by funding constraints over preceding years and represented an extraordinary ad hoc interim contribution intended to bridge the gap between the fund’s assets and its actuarial liabilities. The CIT(A) and ITAT treated the payment as neither an ordinary annual contribution under Rule 87 nor an initial contribution under Rule 88 and relied upon PCIT-1 Vs Exide Industries Limited.
