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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 ..... pectfully following the earlier decisions of the Coordinate Benches, the contribution - made by the assessee to SPARSH Trust is accordingly allowed as an eligible business expenditure under section 37(1) of the Act Disallowance of expenditure u/s 36(1)(va) r.w.s. 2(24)- depositing the employee’s contribution to PF and ESI - Held that:- Admittedly the contribution was deposited by the assessee with the Provident fund on the next day immediately it was due. The Provident fund Act by which the deposit of the contribution by the assessee within the grace period of 5 days from the date when it becomes due. The ld. CIT(A) has given the finding that the payments of ESI & PF were made before the due date of filing of income tax return. In light ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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-operative society engaged in the business of procurement of milk, processing the same to prepare its product and sale thereof. The milk is procured at village level through primary societies. To obtain better quality of milk as well as milk in good quantity, assessee society is providing various facilities to the milk animal owners like vaccination of animals, medical treatment of animals, emergency services etc. Earlier all these services were provided by the assessee himself but feeling difficulties in managing and controlling the same, it was decided to create a trust f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. 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 covered in favour of the assessee by orders of Hon ble ITAT in assessee s own case for AY 2008-09, 2009-10 and 2010-11 respectively. 2.3 The ld AR further submitted that the various observations made by AO for disallowing the contribution made by assessee to trust is incorrect as the basic requirements for invoking sections 37(1) and 80G are quite different, but nonetheless the two sections are not mutually exclusive. Even, if contribution made by an assessee is in the form of donations of the category specified u/s 80G, it could still be termed as an expendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f milk. The assessee has contributed @ ₹ 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 which clearly states that the purpose of contribution is for medical and health facility of the animals of the milk producers at the District level. The contribution made by assessee to trust is thus directly linked with the procurement of better quality, hygienic and more quantity of the milk. It is in the interest of the assessee that the milk animals at the village level from where it procures the milk are healthy and for this purpose, SPARSH Trust incurred expenditure in providing vaternity care, regular treatment, emergency care, preventive care, bre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced 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 confirmed by lower authorities is deleted. 2.5 Similar orders were passed by the Tribunal for the assessment year 2009- 10 and 2010-11. There is no change of circumstances brought to our notice after passing of the orders referred hereinabove or no change in law has been brought to our notice by either of parties. We have heard the rival contentions and perused the material available on record. The issue in question is covered in favour of the assessee by the earlier decisions of the Coordinate Benches in assessee s own case. Respectfully follow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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