Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (6) TMI 779 - AT - Income TaxDisallowance of expenditure incurred in construction of house meant for flood victims called 'Social Welfare Expenditure' - Held that:- Once the assessee discharges this onus, assessee would be entitled to deduction u/s 37(1). In the present case, no factual condition was laid by the assessee to establish that this expenditure was incurred for business purpose nor any attempt is discernible before the lower authorities. Mere bald assertion that the expenditure was incurred for promoting business cannot be accepted without establishing the nexus between expenditure and business. Therefore, it amounts to application of income voluntarily towards charity which cannot be allowed as a deduction. Further an important aspect to be noted here is that the assessee has handed over constructed houses to the Government of Karnataka in terms of MoU. It is not the case of the assessee that the assessee was granted mining license in consideration of expenditure incurred by the assessee. Needless to mention, these kind of contracts are opposed to public policy and void under the provisions of section 23 of the Contract Act. Therefore, it cannot be said that the appellant had incurred this expenditure wholly and exclusively for the purpose of business. - Decided against assessee.
|