Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2022 (11) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (11) TMI 982 - HC - Income TaxCorporate Social Responsibility (CSR) expenses - Allowable business expenses u/s 37 - allowability of only such expenditure laid out wholly and exclusively for the purpose of business or profession and not otherwise - HELD THAT:- Government of India has framed guidelines on Corporate Social Responsibility for Central Public Sector Enterprises and every public sector enterprise is bound to formulate a policy in terms of the said guidelines issued by the Government of India which has been down by the respondent/assessee by framing its policy, copy of which has been placed before us for consideration. Thus, it is clearly seen that there is an obligation on the respondent/assessee to fulfil such responsibility which is not only to take care of his employees but also to rehabilitate the entire area where operations are being carried on by the respective public sector undertaking. The decision rendered in the case of Commissioner of Income Tax vs. Tamil Nadu Tourism Development Corporation Ltd [2016 (8) TMI 229 - MADRAS HIGH COURT] will aid the assessee’s case, wherein the expenses incurred by the said assessee for maintenance of Thiruvalluvar statue at Kanyakumari was held to be allowable deduction under Section 37(1) of the Act. It would be immensely beneficial to refer to the decisions of the hon’ble Supreme in the case of S.A. Builders Ltd. vs. Commissioner of Income Tax [2006 (12) TMI 82 - SUPREME COURT] wherein it was held that an expenditure made may not have been incurred under any legal obligation, yet it is allowable as business expenditure if it is incurred on the ground of commercial expediency. The facts of the case on hand is much better as there was a legal obligation on the part of the respondent/assessee to incur such expenses. Thus, we find that the learned Tribunal rightly allowed the assessee’s appeal and granted relief.
|