Authority: Calcutta High Court (Kolkata)
Order Date: 21 August 2026
Case Overview
- Parties: Appellant – Principal Commissioner of Income Tax 5 Kolkata (Revenue); Respondent – Kolkata Port Trust (formerly Kolkata Port Trust), an artificial juridical person providing port services since 1870.
- Appeal filed under Section 260A of the Income Tax Act, 1961 against the Income Tax Appellate Tribunal (ITAT) Kolkata Bench order dated 18 November 2024 concerning Assessment Year 2017‑18 (also referenced as AY 2018‑19).
- Disputed disallowances: Rs 208,86,57,648 for contribution to the Superannuation Fund exceeding the 27 % ceiling under Rule 87; Rs 63,85,13,674 for contribution to the Gratuity Fund exceeding the 8.33 % ceiling under Rule 103.
- The ITAT had deleted both disallowances, relying on precedents (Exide Industries Ltd., Eastern Equipment & Sales Ltd.) that extraordinary contributions made to cover actuarial deficits are not subject to the statutory ceilings.
- Revenue contended that such contributions were a regular practice over several years and therefore should be treated as ordinary annual contributions subject to the rule‑based limits.
Final Outcome
- The Court answered all four substantial questions of law in the negative, i.e., in favour of the assessee.
- It upheld the ITAT’s deletion of the Rs 208.86 crore superannuation fund disallowance, holding the contribution was an extraordinary ad‑hoc payment to bridge an actuarial deficit and not an ordinary annual contribution.
- It upheld the ITAT’s deletion of the Rs 63.85 crore gratuity fund disallowance, observing that Section 36(1)(v) permits full deduction for approved gratuity funds and the rule‑based ceiling does not apply to such actuarial‑gap contributions.
- The Court found the ITAT order not perverse or arbitrary and dismissed the revenue’s appeal as devoid of merit.
- No order as to costs; certified copy to be supplied upon compliance with requisite formalities.
Topics: Income Tax, Superannuation Contributions, Gratuity Fund