ACIT Vs Thirumalai Chemicals Limited (ITAT Mumbai)
Actual gratuity liability was paid to the retiring employees in just six days, after the end of the relevant year – Allowed by Mumbai ITAT
The Ld.AO disallowed on the ground that the gratuity provisions was created and the same was disallowed amount to Rs.2,13,785/-. But the assessee provided evidence stating that there was no provision made and it is an actual gratuity liability and same was paid to the retiring employees in just six days, after the end of the relevant year. The alleged ground of assessee was duly allowed by the Ld.CIT(A). In the argument, it is stated that the assessee, in provision of gratuity amount to Rs.1,13,36,715/- has provided as per actuarial valuation is already disallowed under section 40A(7) of the Act. The gratuity provision of Rw.2,13,785/- includes the pending settlement of retiring employees, who retired during the year and which was determined on actual basis and paid on 06/04/2019. Accordingly, the assessee considered these expenses under section 37(1) of the Act.
Delay allowed in filing of from 67 due to form 67 was available on record before the AO during the assessment proceeding
Form No. 67, pertaining to the claim of foreign tax credit, was filed by the assessee prior to the filing of the revised return. During the course of assessment proceedings, the Ld. AO has taken cognizance of the revised return and framed the assessment on that basis. Therefore, it is evident that the said Form No. 67 was available on record before the Ld. AO during the assessment proceedings. The co-ordinate bench of the ITAT, Bengaluru, has held that filing of Form No. 67 is not a mandatory but a directory requirement. Therefore, there is no valid basis for the disallowance of the foreign tax credit amounting to Rs.51,07,610/-. Accordingly, restore the matter to the file of the Ld. AO with a direction to verify Form No. 67, and if found in proper order, to allow the foreign tax credit to the assessee in accordance with the provisions of sections 90 / 91 of the Act.
