August 2019

Section 40A(9) – Business disallowance – Contribution to a fund created for the healthcare of the retired employees – The provision was not meant to hit genuine expenditure by an employer for the welfare and benefit of the employees

AJAY R. SINGH
Advocate

15.  The Pr. CIT-2 vs. M/s State Bank of India [Income tax Appeal No. 718 of 2017;

Date of order: 18th June, 2019

(Bombay High Court)]

 

M/s State Bank of India vs. ACIT Mum., ITAT

 

Section 40A(9) – Business disallowance – Contribution to a fund created for the healthcare of the retired employees – The provision was not meant to hit genuine expenditure by an employer for the welfare and benefit of the employees

 

The assessee claimed deduction of expenditure of Rs. 50 lakhs towards contribution to a fund created for the healthcare of retired employees. The Revenue contented that such fund not being one recognised u/s 36(1)(iv) or (v), the claim of expenditure was hit by the provisions of section 40A(9) of the Income-tax Act. The CIT(A) upheld the AO’s order.

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