Home › Tax Laws › CIT. v. V. O. Chidambaranar Port Trust (2019) 311 CTR 227 / 180 DTR 329 / 266 Taxman 141 (Mad.)(HC)

CIT. v. V. O. Chidambaranar Port Trust (2019) 311 CTR 227 / 180 DTR 329 / 266 Taxman 141 (Mad.)(HC)

S. 37(1) : Business expenditure-Contribution to recognized provident fund–Payment of pension to retired employees-As per scheme approved by the Government which had statutory force, hence, it would fall within the general deductions under S.37(1) and cannot be brought under S.36(1)(iv) and (v) of the Act [ S.36(1)(iv), 36(1) (v) ]

Held by the High Court that:

  • Payment of pension to retired employees was made as per scheme (Employees Retirement Regulations) approved and notified by the Government of India, which has statutory force and the assessee is bound by the terms and conditions contained in the regulations, any infraction or violation will result in various other civil consequences. Hence, the nature of deduction claimed in respect of the payments made in terms of the statutory regulation would fall within the general deductions under S. 37 and cannot be brought under S. 36(1)(iv) and (v);
  • Further, assessee having been granted similar benefit for earlier years, the same cannot be denied for the subsequent years, especially when, the nature of payment is in the same fashion in terms of a statutory regulation. (AY.  2010-11, 2012-13)