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2019 (2) TMI 1652 - HC - Income TaxExpenditure incurred by the assessee toward the grant-in-aid to the school/institution - whether allowable u/s 37(1) and the provision of section 40A(9) are not attracted? - HELD THAT:- Assessee had incurred the expenditure in question for providing basic education to the children of the employees. The revenue's objection to such expenditure being allowed in views of Section 40A(9) was overruled by the Tribunal holding that the same was not towards contribution to any fund. Tribunal was of the opinion that the expenditure could be stated to have been incurred for the purpose of business of the assessee. In the process, the Tribunal referred to and relied upon various judgments of the different High Courts touching on similar issue. We notice that in case of P. Balakrishnan, Commissioner of Income Tax Vs. Travancore Cochin Chemicals Ltd. [1999 (10) TMI 33 - KERALA HIGH COURT] had examined whether the amounts spent by the assessee towards contribution to school in which children of the employees were studying, would be hit by Section 40A(9) of the Act and therefore, not allowable as deduction u/s 37. Holding allowability of expenses it was held that the expenditure met by the assessee was wholly and exclusively for the welfare of its employees and also for carrying on the business of the assessee company more efficiently by having a contented labour force. It was neither a donation covered u/s 40A(9) nor of a capital in nature not covered u/s 37(1). Also see CIT Vs. Bharat Petroleum Corporation Limited [2001 (3) TMI 20 - BOMBAY HIGH COURT] - Decided in favour of the assessee and against the Department.
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