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TMI Blog2016 (6) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AO without appreciating the fact that assessee failed to prove direct business nexus and it is not an allowance expenditure u/s 37(1). (ii) (a) Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the addition of Rs. 16,726/- & Rs. 39,94,886/- made for depositing the employees contribution to ESI & CPF respectively beyond the time limit provided in the respective acts. (b) Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in holding that Employees contribution to ESI & CPF are government by the provision of section 43B and not by section 36(1) r.w.s. 2(24) of I.T. Act. 2. The brief facts of the case are that the assessee is a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee while on other hand, it states that it is not contract given to the trust. Both such claims are contradictory to each other. Assessee simply contributes in the trust at the stipulated rates and therefore claim of assessee regarding reimbursement of its expenditure is not acceptable. Assessee failed to furnish any document/evidence to substantiate its claim even otherwise. Contribution to 'Sparsh' is made as a cattle development fund and assessee deals in dairy products. Thus, how a contribution for development of cattle has nexus with the business of the assessee. Therefore, the contribution cannot be held to be incurred wholly and exclusively for the purpose of the business. 2.2 At the outset, the ld AR submitted that the issue is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies below, we find that assessee deserve to succeed in its ground raised. It is noticed that before creating SPARSH, the assessee was doing all these expenditure itself. Just for betterment of administration services, the assessee created the Trust through whom these expenses are incurred. The Profit & Loss account of the Trust is maintained, copy of which is placed in the compilation and it is seen that whatever amount has been given by assessee or reimbursed by assessee, that has been spent by the trust on the animals to get better quality and quantity of milk. The assessee has contributed @ Rs. 0.05 per litre of milk procured to its trust for the purpose of incurring expenditure for better quality of milk. An agenda note was prepared whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed the claim of assessee by observing that since assessee has made donation u/s 80G and, therefore, deduction u/s 80G is allowable whereas the facts are otherwise. The assessee has not made any donation but has contributed to the trust for a specific purpose i.e. to incur the expenditure to get better milk from milk animal. Various case laws relied upon by the assessee are in support of the case of the assessee. We are not getting into details in respect of those cases as they have already been mentioned in the written submissions which are reproduced herein above. In view of these facts and circumstances, we hold that the expenditure/contribution made by assessee is allowable as business expenditure. Accordingly, the addition made and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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