R.K. Panda, Accountant Member.-This appeal filed by the assessee is directed against the order dated September 2, 2011 of the Commissioner of Income-tax (Appeals)-I, Pune relating to the assessment year 2006-07.

2. The only effective ground raised by the assessee reads as under :

"On facts and circumstances prevailing in the case and as per provisions of law, it be held that the disallowance of payment made to Karmachari Welfare Fund of Rs. 18,61,700 under section 40A(9) of the Income-tax Act, 1961, is not in accordance with the facts prevailing in the case. The disallowance so made be deleted."

3. The facts of the case, in brief, are that the assessee-company is an undertaking of the Government of Maharashtra established for providing Warehousing facilities. The assessee has contributed a sum of Rs. 18,61,700 towards MSWC Karmachari Welfare Fund and claimed the same as business expenditure. The Assessing Officer following his order for the assessment years 2003-04 to 2005-06 disallowed the claim of the assessee on the ground that the deduction for such contribution is prohibited by section 40A(9) of the Income-tax Act. In appeal the learned Commissioner of Income-tax (Appeals) following his orders for the earlier orders upheld the action of the Assessing Officer. Aggrieved with such order of the Commissioner of Income-tax (Appeals) the assessee is in appeal before us.

4. After hearing both the sides we find the Tribunal in the assessee's own case vide consolidated order dated August 23, 2011 for the assessment years 2003-04 to 2005-06 in ITA No. 382/PN/2007, ITA 794/PN/2007 and ITA No.1372/PN/2007 has allowed the claim of the assessee by holding as under :

"We have carefully considered the rival submissions. A perusal of section 40A(9), which has been extracted by us elsewhere in the order brings out that it seeks to disallow sums paid by the assessee as an employer to the entities prescribed therein. In the present case, it is not in dispute that the assessee has incurred the expenditure of Rs.16,77,170 by way of contribution to the Karmachari Welfare Fund, as an employer, and therefore, its deductibility is governed by the provisions of section 40A(9) of the Act. The disallowance envisaged in section 40A(9) of the Act is subject to certain exceptions. As per the said exceptions, no disallowance would be made where such sum is paid : (i) for the purpose and to the extent provided under clauses (iv) or (v) of section 36(1) of the Act ; or, (ii) as required by or under any other law for the time being in force. The claim of the assessee is that the contribution to the Karmachari Welfare Fund in question is covered by the second exception provided in section 40A(9) of the Act, as it has been paid as mandated by law.

10. In order to test the efficacy of the assessee's plea, the moot question to be addressed is as to whether the Regulations in terms of which the payment has been made by the assessee, carry the force of law or not. In this connection, we may refer to the judgment of the hon'ble Supreme Court in the case of U.P. Warehousing Corporation v. Vijay Narayan Vajpayee [1980] 3 SCC 459 relied upon by the appellant before us. The status of the entity before the hon'ble Supreme Court was analogous to that of the appellant before us. As has been observed earlier, the appellant is a corporation established by the State Government in exercise of the powers conferred by sub-sections (1) and (3) of section 28 of the Agricultural Produce (Development & Warehousing) Corporation Act, 1956 (28 of 1956), which was subsequently replaced by Warehousing Corporation Act, 1962 (58 of 1962). The appellant is a statutory body fully controlled and managed by the Government. The entity before the hon'ble Supreme Court was also a similarly established corporation, being a statutory body wholly controlled and managed by the State Government of U.P. The hon'ble Supreme Court referred to its earlier decision in the case of Sukhdev Singh v. Bhagatra