Authority: Calcutta High Court (Special Jurisdiction – Income Tax)

Order Date: 21 August 2026

Case Overview

  • Appellant: Principal Commissioner of Income Tax 5 Kolkata (Revenue); Respondent: Kolkata Port Trust (formerly Kolkata Port Trust, now VS‑Syama Prasad Mookherjee Port Kolkata).
  • The dispute concerned the disallowance of Rs.564,49,19,729 under Section 37 read with Section 43B for contributions to the Superannuation Fund exceeding the 27 % ceiling fixed under Rule 87 of the Income‑Tax Rules, 1962, for Assessment Year 2020‑21.
  • The assessee filed its Return of Income on 11 March 2022 declaring total income of Rs.227,13,00,220. The Assessing Officer, after scrutiny, issued an assessment order on 28 September 2022 determining total assessed income of Rs.780,81,75,188, incorporating the above disallowance together with other additions (Club contribution Rs.1,31,23,083; Section 14A(2) disallowance Rs.21,13,100; Section 41 deemed profit Rs.5,35,626).
  • The assessee appealed to the Commissioner of Income Tax (Appeals) – NFAC, which deleted the superannuation and club contributions but upheld the other additions. The Revenue appealed only the superannuation disallowance before the Income Tax Appellate Tribunal (ITAT), Kolkata.
  • ITAT, relying on the Calcutta High Court decisions in Exide Industries Ltd. (2023) and Eastern Equipment & Sales Ltd., held that the contributions were extraordinary ad‑hoc payments to bridge an actuarial deficit and therefore not subject to the Rule 87 ceiling, deleting the disallowance.
  • The Revenue filed a petition under Section 260A of the Income‑Tax Act before this Court, raising three substantial questions of law concerning the ITAT’s correctness, the applicability of the Exide precedent, and whether the ITAT order was perverse or arbitrary.

Final Outcome

  • The Court answered all three substantial questions in the negative, holding that the ITAT correctly deleted the disallowance of Rs.564,49,19,729 and that the order was not perverse or arbitrary.
  • Consequently, the appeal filed by the Revenue is dismissed as devoid of merit; the deletion of the superannuation fund disallowance stands.
  • No order as to costs was made.

Topics: Tax Dispute, Superannuation Contributions, Judicial Review