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2021 (2) TMI 736 - ITAT KOLKATAAllowable revenue expenditure u/s 37(1) - Contribution made to Star Shiksha Samity which runs a school in the Mills compound of the appellant for education and welfare activities of the children of the employees - according to AO it is in the nature of donation and liable to be disallowed - HELD THAT:- We note that explanation 2 to section 37(1) of the Act came into operation w.e.f 01.08.2015 and cannot be held as retrospective. We also find that this claim of the assessee is not as per the CSR - we note that the expenses have been claimed under the head staff/labour and other welfare expenses and the fact discernable is that the assessee maintains a school in the name of Star Paper Mill Higher Secondary School in its own mill compound and as well as expenses are meant for the maintenance of the school as well as play ground etc. which are for the welfare of the children of the mill workers as well as to the local residents have not been controverted by the authorities below. Since such similar claims made by the assessee for maintenance of school has not been disallowed in the earlier years, so by applying principle of consistency we direct the AO to allow the expenditure claimed by the assessee. Expenditure u/s 43B on the payment basis - payments in respect of entry tax on fuel kept under advance account in the balance sheet - HELD THAT:- The entry tax levied by the Govt. of UP is an allowable deduction u/s 43B sub-clause (a) of the Act provided the amount is remitted by the assessee (entry tax) and will be allowed in the year in which the sum is actually paid by the assessee . Since the issue of tax which was paid to the UP Govt. was sub-judice, as discussed supra, the assessee did not claim the deduction but was shown in the balance sheet as advance, and did not claim in its return of income. And since this claim/ground is raised before us for the first time, in the interest of justice, this issue is remanded to the file of AO for verification. If the AO finds that the assessee has actually paid the entry tax to the Govt. of UP as entry tax and has not claimed deduction in its ROI, then the sum may be allowed in accordance to section 43B of the Act. Appeal of the assessee is allowed for statistical purposes.
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