The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) held that contributions to approved superannuation fund were deductible if it was made within prescribed limits of under section 36(1)(iv) of the Income Tax Act
Syama Prasad Mookerjee Port (assessee) engaged in providing port services and it was under the supervision of the Ministry of Shipping under the Union Government. This batch of eight appeals was against the order of Commissioner of Income Tax (appeals) CIT(A) filed by the Revenue Department. The Assessee filed Cross objections in order to support the findings of the CIT(A).
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The counsel of the Revenue argued that the strict construction of Section 36(1)(iv) justifies the disallowance made by the Assessing Officer(AO). The counsel also criticized the findings of the CIT(A).
On the other hand, the counsel for Assessee argued that the order of AO was against the judgement of the Exide Industries case. The counsel of the CIT(A) relied on the judgement and supported the order of the CIT(A).
The two-member Bench comprising Sanjay Garg (Judicial Member) and Sanjay Awasthi (Accountant Member) observed that the order of the superior court should prevail over the order of the inferior court. Therefore, it relied on the decision of the Calcutta High Court in the case of Exide industries.
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The Tribunal held that contribution to an approved superannuation fund is deductible if it does not exceed the prescribed limit. The tribunal also held that there was no ceiling limit fixed for contributions made to superannuation funds unless they were initial and annual contributions. It was not disputed by the revenue that the contribution was made in excess of the prescribed limit.
Therefore, the tribunal held that the amount paid by the assessee was deductible under section 36(1)(iv) of the Income Tax Act. The appeal filed by the revenue department was dismissed.
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