2016 (8) TMI 963

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..... T [2003 (1) TMI 71 - BOMBAY High Court ] wherein payments were made to a schools where the children of its employees studied. This payment was allowed as being incurred predominantly for staff welfare and consequently expenditure incurred in running of the business. Therefore allowable as business expenditure Accrual of income - whether the Tribunal was right in law in accepting the plea of the assessee that the interest income on the securities has to be taxed on the due basis only, instead of accrual basis as per the mercantile system of accounting followed by the assessee? - Held that:- As agreed position between parties that the issue arising here in stand concluded against revenue and in favour of the respondent assessee by the deci .....

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..... ibunal was right in law in treating the expenditure of ₹ 100.55 Lacs incurred for payment to Educational Institutions for reservation of seats to its officers as allowable expenditure u/s. 37(1) of the Income Tax Act, 1961, even though the same was not related to the business activity of the assessee ? (c) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in accepting the plea of the assessee that the interest income of ₹ 38.24 Crores on the securities has to be taxed on the due basis only, instead of accrual basis as per the mercantile system of accounting followed by the assessee ? (d) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in .....

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..... iture. (iv) Mr.Suresh Kumar on behalf of the revenue submits that the amount paid to the school for reservation of seats is in the nature of donation. Donation according to him is not deductible under Section 37 of the Act. (v) We find that the issue raised herein is identical to the one which was subject matter of consideration by this Court in Mahindra and Mahindra Ltd vs. CIT 261 ITR 501 wherein payments were made to a schools where the children of its employees studied. This payment was allowed as being incurred predominantly for staff welfare and consequently expenditure incurred in running of the business. Therefore allowable as business expenditure. Thus question (b) as raised is concluded against the revenue and in favour of t .....

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