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Tax Publishers
Insertion of Section 11(7) vide Finance Act, 2023
w.e.f. 01-04-2023 - implications
Facts:
Assessee a not for profit organization claimed provision
for gratuity as an application of income on accrual basis in its return.
Revenue disallowed the same citing non-payment of such gratuity. Assessee's
plea was insertion of Section 11(7) w.e.f. 01-04-2023 was only to prevent
allowance of such expenses on accrual basis and allow the same only upon actual
payment for non-profit organizations. Thus prior to this insertion of this
provision the law was to be read to be allowing the expenses on accrual basis,
otherwise the insertion becomes otiose in law. CIT(A) went
with the views of the AO. On higher appeal by the assessee -
Held in favour of the assessee that the gratuity accrual
was an application of income.
Applied:
Sitaram Bhartia Institute of Science & Research v.
DCIT in [ITA No. 202/Kol/2020 for AY 2013-14, dt. 4-1-2023] : 2023 TaxPub(DT)
303 (Kol-Trib)
Case: M.P. Birla
Institute of Fundamental Research v. DCIT(E) 2023 TaxPub(DT) 5564 (Kol-Trib)
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