|QUERY:||The assessee is a Co-Operative Society and maintaining accounts on mercantile system of accounting. During the financial year 2008-09 (Asst. yr. 2009-10) on the basis of actuary valuation made provisions of Rs. 80 lakhs towards employees gratuity fund and during the same financial year deposited full amount to the LIC under Group Gratuity Life Assurance Scheme. The AO wants to disallow as on the ground that it is not Approved Gratuity Fund. Assessee’s pleas is that the same is allowable u/s. 40A(7) read with section 43B. In past so many years the same was allowed by the AO though no specific reference was made.
Kindly let us know the legal view with case law if available.
|ANSWER:||Click here to read the full answer of the expert|
|EXPERT:||CA. H. N. Motiwalla|
|SECTION(S):||29, 40A(7), 43B|
|CATCH WORDS:||deductions, disallowance, Group Gratuity|
S. 29 of the Act reads as under:
“The income referred to in section 28 shall computed in accordance with the provisions contained in sections 30 to 43D”.
S. 43B reads as under: