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Principal Commissioner of Income-Tax Versus Rajasthan State Seed Corporation Ltd.

2016 (9) TMI 59 - RAJASTHAN HIGH COURT

Allowability of prior period expenses - Held that:- A finding of fact has been recorded by the appellate authorities that approval for payment of the said expenditure was given during the year under appeal therefore the liability crystallised during the year and similar method was being regularly followed by the assessee consistently and when there is a finding recorded by the appellate authorities that the expenditure crystallised during the year, was written in the books this year and on year .....

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ontribution made to the State Renewal fund is solely for the purposes of the welfare and benefit of the employees. In our view, it is for the assessee to decide whether any expenditure should be incurred in the course of business and expenditure of this nature being for business expediency is certainly allowable deduction under section 37(1) of the Act. In our view any normal expenditure for the welfare and benefit of the employees is allowable expenditure under section 37(1), the Tribunal has c .....

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2015 passed by the Income-tax Appellate Tribunal (for short ITAT) in I. T. A. No. 893/JP/2012. It relates to assessment year 2009-10. 2. The brief facts which can be noticed are that the respondent is a corporation established by the Government of Rajasthan and is engaged in procurement, processing and trading of seeds, tractor and agriculture implements. The assessee claims that the accounts are audited. During the course of assessment proceedings the Assessing Officer desired the assessee to e .....

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ng the previous year relevant to the year under assessment. (ii) the Group Gratuity Scheme was not approved by the Commissioner which was mandatory and the same being not approved, the deduction under section 36(1)(v) was not allowable. (iii) State Renewal Fund is not an allowable expenditure within the provisions of section 37(1). 4. The assessee assailed the same before the learned Commissioner of Income-tax (Appeals) who allowed all the three expenses. The Tribunal also upheld the order of th .....

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ry for a claim to be deductible under section 36(1)(v) to get it approved and once the Gratuity Insurance Scheme was not approved the claim was rightly disallowed. (iii) In so far as the claim of contribution to the State Renewal Fund is concerned he contended that the assessee could not prove the same to be allowable under section 37(1) and thus the assessee having not been able to prove the expenditure the Tribunal erred in allowing all the 3 expenses. He further contended that substantial que .....

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horities that approval for payment of the said expenditure was given during the year under appeal therefore the liability crystallised during the year and similar method was being regularly followed by the assessee consistently and when there is a finding recorded by the appellate authorities that the expenditure crystallised during the year, was written in the books this year and on year to year basis was claimed in the same manner and fashion was rightly claimed and allowed during the year, is .....

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ore than almost 25 years, the assessee could not have been blamed for the same. There is no denial by the Assessing Officer that application for approval has not been filed by the assessee on March 31, 1981. Even the Assessing Officer admits that the application for approval was submitted on March 31, 1981 and both the appellate authorities have come to a definite finding of fact that once an application has been moved for approval and having not been rejected then the claim could not have been .....

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been given by the Tribunal that the amounts are being disallowed by the learned Assessing Officer from year to year at least from the assessment year 1996-97 i.e. almost 20 years but is being allowed regularly in appeal therefore, for this reason also we reject the claim of the Revenue. The Assessing Officer ought not to have made a repeated addition merely for this purpose and a litigation of this nature ought not to have come before this court as appeals all throughout is being allowed year af .....

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r way as at least the respondent has also to incur public money to defend its case being a Government of Rajasthan Undertaking in filing repetitive appeals though succeeding year after year. Merely because the tax effect is more than what is prescribed in the Circulars be it old or the latest being in December 2015 is no ground to file such appeals, we though were inclined to levy cost on the Revenue but stopped ourselves in doing the same to make it clear to the Revenue to be more careful in fu .....

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