Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Home Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles News Highlights
Extracts
Home List
← Previous Next →

Kanhaiyalal Dudheria Versus Joint Commissioner of Income-tax, Bellary

2017 (6) TMI 779 - ITAT BANGALORE

Disallowance 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s 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. - IT APPEAL NOS. 782 & 1495/BANG./2016 - Dated:- 17-5-2017 - VIJAY PAL RAO, JUDICIAL MEMBER, AND INTURI RAMA RAO, ACCOUNTANT MEMBER For The Appellant : B.S. Balachandran For The Respondent : G. Kalamadar ORDER .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

orders of the Learned Lower Authorities are bad in law and contrary to the evidences and facts on record. 2. The Learned CIT(A) has erred in upholding the disallowance of ₹ 10,823/- without appreciating that the expenditure was not prohibited by law or in the nature specified by Explanation under section 37 (1). 3. The Learned CIT-(A) erred in not appreciating that social welfare expense of ₹ 1,61,30,480/- is a legitimate business expenditure and ought not to have been disallowed by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Return of income for the assessment year 2011-12 was filed vide electronic mode on 30/9/2011 declaring income of ₹ 84,57,630/-. After processing said return of income u/s 143(1) of the Income-tax Act, 1961 ['the Act' for short] the case was selected for scrutiny assessment by issuing notice u/s 143(2) dated 18/9/2013 and the assessment was finally completed at total income of ₹ 18,45,98,940/-. The disparity between the assessed income and the returned income is on account of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

roviding houses to the affected people. The appellant readily agreed to do same and entered MOU with the Govt. of Karnataka in terms of which the appellant was required to construct houses and deliver same to the Government. Accordingly, the appellant constructed houses and handed 169 houses to the Government. During the previous year relevant to assessment year under consideration, an expenditure of ₹ 1,61,30,48/- was incurred towards construction of 169 houses in Gundiganur village in Si .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

purpose of business and therefore held that not allowable as deduction u/s 37(1) of the Act. Accordingly, he disallowed the same. The AO disallowed a sum of ₹ 1,61,30,480/- incurred in construction of said houses. The AO also disallowed ₹ 10,823/- being penalty paid and debited to P&L Account. 5. Being aggrieved, an appeal was preferred before the CIT(A), who, vide impugned order confirmed the order of the AO. Being aggrieved, the assessee is in appeal before us in the present a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

urring of expenditure, goodwill is created in the people in the surrounding villages which would help in carrying out business. Thus, it was submitted that same should be allowed as deduction. Reliance was placed on the co-ordinate bench decision in the case of Asstt. CIT v. Jindal Power Ltd. [2016] 70 taxmann.com 389 (Raipur - Trib.) and the decision of the Hon'ble High Court of Karnataka in the case of CIT v. Infosys Technologies Ltd. [2014] 360 ITR 714. On the other hand, learned Standing .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

elp people who were rendered homeless on account of unprecedented floods in Siriguppa Taluk and handed over to the Government of Karnataka is allowable as deduction u/s 37(1) of the Act or not. It is not disputed fact that this expenditure was incurred by the assessee voluntarily. In order to claim deduction u/s 37(1) the conditions to be satisfied are that a item of expenditure should not be an item of expenditure described in sections 30 to 36 and should not be described as capital expenditure .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

it is not necessary to establish the necessity of incurring of such expenditure. It is only if it is for promoting business, as held by the Hon'ble Supreme Court in the case of Sassoon J. David & Co. (P.) Ltd. v. CIT [1979] 118 ITR 261 wherein it has been held as under: It is relevant to refer at this stage to the. legislative history of section 37 of the Income-tax Act, 1961, which corresponds to section 10(2)(xv) of the Act. An attempt was made in the Income-tax Bill of 1961 to lay do .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

somebody other than the assessee is also benefited by the expenditure should not come in the way of an expenditure being allowed by way of deduction under section 10(2)(xv) of the Act if it satisfied otherwise the tests laid down by law . Again, the words for the purpose of business used in section 37(1) should not be limited to the meaning of earning profit alone . Business expediency or commercial expediency may require providing facilities like school, hospital, etc., for the employees of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Forum
what is new what is new
  ↓     bird's eye view     ↓  


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version