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2012 (9) TMI 765 - SC - Income TaxDeduction u/s 37(1) - welfare expenses towards providing education to its employees' children & Payments to other educational institutions where the children of its employees were studying- Held that:- From the assessment order for AY 1985-1986 and from the Order of CIT (A) that the assessee has made payments to schools other than Sandur Residential School and Sandur Education Society, which fact has not been discussed either in the Order of ITAT or in the Order of the High Court. The interpretation of Section 40A(9) clearly brings out a dichotomy between 'contribution' and 'reimbursement' - Section 40A(9) was inserted as a measure for combating tax avoidance - In the present case how the ITAT and the High Court have come to the conclusion that these payments made by the assessee constituted reimbursement. As for the AY 1985-1986, the AO records that an amount of Rs. 11,40,641/- has been incurred by payments to other educational institutions and not by way of payments made to school or the society promoted by the assessee. For each assessment year, therefore, the ITAT will have to record a separate finding as to whether the claim for deduction is being made for payments to the school promoted by the assessee or to some other educational institutions/schools and thereafter apply Section 40A(9) which has not been done in the present case - in favour of assessee.
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