Kolkata Port Trust Tax Disallowance Upheld

Authority: Calcutta High Court

Order Date: 21 August 2026

Parties: Revenue (appellant) vs. Kolkata Port Trust (assessee‑respondent), a statutory body established in 1870.
The appeal was filed under Section 260A of the Income Tax Act, 1961 challenging the ITAT Kolkata Bench order dated 18 November 2024 for Assessment Year 2021‑22.
The assessee filed its return on 11 March 2022 showing total income of Rs 212,86,43,210. The Assessing Officer, after scrutiny, issued an assessment order on 23 December 2022 determining total assessed income of Rs 861,71,07,384, disallowing Rs 648,84,64,174 on contributions to the approved Superannuation Fund exceeding the 27 % ceiling under Rule 87.
The CIT(A) (NFAC, Delhi) allowed the assessee and deleted the disallowance, a decision affirmed by the ITAT, which held that the contributions were extraordinary payments to bridge an actuarial deficit and therefore not subject to the Rule 87 ceiling.
The revenue contended that the contributions were a regular practice and should be treated as ordinary annual contributions; it also argued that the ITAT erred in relying on the Exide Industries judgment.
The court framed three substantial questions of law concerning (i) the applicability of Rule 87 to the contributions, (ii) the correctness of the ITAT’s reliance on Exide Industries, and (iii) whether the ITAT order was perverse or arbitrary.

The Court answered all three substantial questions in the negative, i.e., in favour of the assessee and against the revenue.
It held that extraordinary, ad‑hoc contributions made to remedy an actuarial deficit are not “ordinary annual contributions” and the 27 % ceiling under Rule 87 does not apply.
The ITAT’s deletion of the Rs 648,84,64,174 disallowance is upheld; the revenue’s appeal is dismissed.
No order as to costs was made; the Court directed that any urgent certified copy be supplied upon compliance with requisite formalities.

Topics: Income Tax, Superannuation Fund