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2013 (3) TMI 269 - HC - Income TaxEntitlement for deduction in respect of donations to the Chennai Mathematical Institute - AO pointed out that the donations were paid by the two companies viz., SCTPL and SIL to the CMI and the donee also issued the receipts in favour of those two companies only - Held that:- As it is seen that the assessee requested the other two companies to make the expenditure on their behalf by way of scientific research as it was not having sufficient funds at that time. This fact is not disputed by the Revenue or disproved by them. Therefore, the payment was made by the other two companies to the CMI. Even though they made the payment and obtained receipts in their name, the fact remains that they have not claimed any deduction nor shown those expenditure in their books of accounts . On the other hand, it is only the assessee who had shown expenditure in the journal entry and claimed deduction. It is also stated that the assessee had paid the money subsequently to those two companies in the subsequent year. Therefore, the fact remains that what was paid to the CMI by the other two companies was not actually paid by them and it was paid only on behalf of the assessee. When the payment, receipt and the status of the CMI as notified under Section 35(1)(ii) by the Government of India were not disputed, failure to understand as to how the assessee can be disallowed deduction under Section 35(1)(ii). Even the said expenditure was shown in the accounts placed before the IRDA in the second half of the assessment year. Thus the assessee is the actual payer to the CMI for its scientific research and consequently entitled to deduction under Section 35(1)(ii) - in favour of assessee. Excess provision claim under the heads consultancy charges and professional fees - Held that:- It is a provision for professional fees and consultancy charges. The payment liability of such charges or fees by the assessee was certain. Though the liability was certain, only the quantum was not certain at the time of filing the return, in view of the continuous negotiations with the parties. Therefore, the assessee was left with no other option to make provision based on the original claim made by the parties. When such being the factual position, the decision reported in Commissioner of Income Tax Vs. Forbes Campbell Finance Ltd.[2012 (7) TMI 662 - MADRAS HIGH COURT] is not helpful to the Revenue in this case. Thus, question of law answered in favour of assessee. Disallowance of expenditure on setting up of a new office at Mumbai - Held that:- Unable to appreciate the contention of the Revenue as to how Mangayarkarasi case [2009 (7) TMI 17 - SUPREME COURT] can be applied to the case on hand when the facts are totally different and distinguishable and the deduction sought to be made by the assessee is not the one under Section 31 and on the other hand, as rightly contended by the assessee, the deduction was sought in respect of the expenses made towards designing and lay out as well as other temporary partition and construction made for making the office functional . When that being the factual position the decisions of this Court reported in Commissioner of Income Tax Vs.Ayesha Hospitals P.Ltd.(2006 (10) TMI 117 - MADRAS HIGH COURT), Commissioner of Income Tax Vs Sanco Trans Ltd.(2006 (1) TMI 83 - MADRAS HIGH COURT) and Thiru Arooran Sugars Ltd., Vs. Deputy Commissioner of Income Tax (2013 (2) TMI 450 - Madras High Court) wherein similar expenses made by the respective assessees therein in the leased premises and found that such expenses made by the assessee was deductible as revenue expenditure - in favour of the assessee.
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