Madras High Court
M/S.Sanmar Speciality Chemicals ... vs The Deputy Commissioner Of Income ... on 27 July, 2021
Tax Case Appeal Nos.601 and 602 of 2016
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 27.07.2021
CORAM
THE HON'BLE MR.JUSTICE M. DURAISWAMY
AND
THE HON'BLE MRS.JUSTICE R. HEMALATHA
Tax Case Appeal Nos.601 and 602 of 2016
M/s.Sanmar Speciality Chemicals Ltd.,
No.9, Cathedral Road,
Chennai – 600 086. ... Appellant
in all appeals
Vs.
The Deputy Commissioner of Income Tax,
Corporate Circle – 6(1),
Chennai – 600 034. ... Respondent
in all appeals
Tax Case Appeals in Tax Case Appeal Nos.601 and 602 of 2016
filed under Section 260A of the Income Tax Act, 1961 against the order
of the Income Tax Appellate Tribunal, Chennai "A" Bench, dated
18.12.2015 passed in I.T.A.Nos.1523/Mds/2015 and 1524/Mds/2015
respectively.
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Tax Case Appeal Nos.601 and 602 of 2016
For Appellant : Mr.R.Venkat Narayanan
for M/s.Subbaraya Aiyar Padmanabhan
in all appeals
For Respondent : Mr.J.Narayanaswamy
Senior Standing Counsel
in all appeals
COMMON JUDGMENT
(Delivered by M.DURAISWAMY, J.)
T.C.A.No.601 of 2016 arises against the order passed in
I.T.A.No.1523/Mds/2015 in respect of the Assessment Year 2009-10 on
the file of the Income Tax Appellate Tribunal, Madras “A” Bench.
T.C.A.No.602 of 2016 arises against the order passed in
I.T.A.No.1524/Mds/2015 in respect of the Assessment Year 2011-12 on
the file of the Income Tax Appellate Tribunal, Madras “A” Bench.
Challenging the order passed by the Tribunal, the assessee has filed the
above appeals.
2.For the Assessment Years 2009-10 and 2011-12, the assessee
filed the return of income admitting the return loss. The return was
processed under Section 143(1) of the Income Tax Act and the case was
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Tax Case Appeal Nos.601 and 602 of 2016
selected for scrutiny and notice under Section 143(2) was issued and
subsequently, the notice under Section 142(1) was also issued. While
completing the assessment, the Assessing Officer disallowed the
provision for gratuity claimed by the assessee under Section 40A(7)(b) of
the Income Tax Act. According to the Assessing Officer, the gratuity
payment is covered under Section 43B(b) of the Act as per which the
payment made during the year is eligible and the provisions made
towards the items mentioned in the section are not allowable deductions.
The Assessing Officer negatived the claim of the assessee since it has not
made the actual payment and disallowed the provision made towards
gratuity and added the same to the total income.
3.Aggrieved by the order passed by the Assessing Officer, the
assessee preferred appeals before the Commissioner of Income Tax
(Appeals) and the Appellate Authority allowed the appeals. Challenging
the order of the Commissioner of Income Tax (Appeals), the Revenue
filed an appeal before the Income Tax Appellate Tribunal and the
Tribunal, by the impugned orders, remitted the matter back to the
Assessing Officer to decide the matter afresh.
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Tax Case Appeal Nos.601 and 602 of 2016
4.Aggrieved over the order passed by the Income Tax Appellate
Tribunal, the assessee has filed the above appeals.
5.The above appeals were admitted on the following substantial
questions of law :
T.C.A.No.601 of 2016 :
“1.Whether on the facts and in the circumstances of
the case and in law the Tribunal was right in holding that
the provision of Rs.27,62,021/- made by the assessee
towards the approved gratuity fund with LIC of India and
approved by the Commissioner of Income Tax is not an
allowable deduction under Section 40(A)(7)(b) of the Act?
2.Whether on the facts and in the circumstances of
the case and in law the Tribunal was right in holding that
notwithstanding the allowability of provision made for
gratuity under Section 40A(7), the actual payment of the
amount to the Trust has to be effected before the same can
be allowed ?
3.Whether on the facts and in the circumstances of
the case and in law the Tribunal was right in holding that
the provisions of Section 43B(b) overrides the provisions
of Sec.40A(7)(b) of the Act?”
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Tax Case Appeal Nos.601 and 602 of 2016
T.C.A.No.602 of 2016 :
“1.Whether on the facts and in the circumstances of
the case and in law the Tribunal was right in holding that
the provision of Rs.55,07,763/- made by the assessee
towards the approved gratuity fund with LIC of India and
approved by the Commissioner of Income Tax is not an
allowable deduction under Section 40(A)(7)(b) of the Act?
2.Whether on the facts and in the circumstances of
the case and in law the Tribunal was right in holding that
notwithstanding the allowability of provision made for
gratuity under Section 40A(7), the actual payment of the
amount to the Trust has to be effected before the same can
be allowed ?
3.Whether on the facts and in the circumstances of
the case and in law the Tribunal was right in holding that
the provisions of Section 43B(b) overrides the provisions
of Sec.40A(7)(b) of the Act?”
6.When the appeals are taken up for hearing, Mr.R.Venkat
Narayanan for M/s.Subbaraya Aiyar Padmanabhan, learned counsel for
the appellant, submitted that the authority had already passed an order
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Tax Case Appeal Nos.601 and 602 of 2016
dated 31.03.2017 in favour of the appellant/assessee, and hence, the
above appeals have become infructuous.
7.In view of the submission made by the learned counsel for the
appellant, the above Tax Case Appeals are dismissed as infructuous. No
costs.
[M.D., J.] [R.H., J.]
27.07.2021
Index : Yes/No
Internet : Yes
mkn
To
1. Income Tax Appellate Tribunal, Chennai "A" Bench
2.The Deputy Commissioner of Income Tax,
Corporate Circle – 6(1),
Chennai – 600 034.
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Tax Case Appeal Nos.601 and 602 of 2016
M. DURAISWAMY, J.
and
R. HEMALATHA, J.
mkn
T.C.A. Nos.601 and 602 of 2016
27.07.2021
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