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2016 (12) TMI 349 - ITAT MUMBAIDeduction u/s. 37(1) - contribution to the Pune Bench of the Institute of Chartered Accountants of India towards construction of a administrative building of the said branch - Held that:- From the record we found that the Pune Branch of the Western India Regional Council (the branch) of the Institute of Chartered Accountants of India (ICAI) had proposed to construct a building for locating its administration office including an auditorium, information technology centre, reading room facilities, pantry, cafeteria and parking facilities for the members and students of the institute.We also found that for the said purpose the Pune Branch had set up Pune Branch Building Fund and, the Institute has received approval under Section 80 G of the Income Tax Act, 1961 ref. O.DIT (E) 2005-06 T. 1041/1001 valid up to 31st March, 2009. Assessee firm has major presence in Pune around half of its compliance clientele and 30-40% of the revenues are generated from Pune. The Hon’ble Supreme Court in the case of S A BUILDERS (2006 (12) TMI 82 - SUPREME COURT ) reiterated the proposition that the expression "commercial expediency" is an expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. The expenditure may not have been incurred under any legal obligation, but yet it is allowable as a business expenditure if it was incurred on grounds of commercial expediency.In view of the above discussion, we can conclude that if the claim is allowable u/s 37(1) itself there is no case for proceeding to Chapter VIA which applies to all assessees whether or not they are carrying on business or profession. Thus we direct the AO to allow the contribution made by assessee under Section 37(1) of the Act. - Decided in favour of assessee.
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