9911796707
TMI Blog2021 (2) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... bution made to Star Shiksha Samity which runs a school in the Mills compound of the appellant for education and welfare activities of the children of the employees. 3. The facts of the case is that AO noted that from the details of staff welfare expenses (others) filed by the assessee that a sum of Rs. 1,00,000/- has been paid to Star Shiksha Samity which according to AO is in the nature of donation and liable to be disallowed. On appeal, the Ld. CIT(A) confirmed the action of AO by holding as under: "6.1. I have considered the submission of the A.R of the appellant along with the assessment order. As far as the Act is concerned expenditure of such nature should come within the ambit of Section 80G or section 37 of the Act. I find that n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also for carrying out some welfare activities like celebration of festivals, independence day, republic day etc. Since the school is located in the Mills compound itself, children of many employees of the appellant are students of the school. Hence, it can be said that the amount paid by the Appellant to Star Shiksha Samity was used by them for the welfare of the school and children of its employees. We pray that the amount should not have been treated as donation by the AO but as expenses incurred by the Appellant for the benefit of its employees and were allowable u/s 37 as expenses incurred for the welfare of the employees. 6. The Ld. D.R supported the action of the Ld. CIT(A) and does not want us to interfere. 7. Having heard bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to the children of the local areas and this can be even termed as part of the Corporate Social Responsibility (CSR) and therefore, it has to be allowed. According to Ld. A.R. the amendment in the scheme of Section 37(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act) which has been introduced w.e.f 01.04.2015 cannot be construed as to the disadvantage to the assessee in the period prior to this amendment. According to him, this disabling provision, as set out in Explanation 2 to Section 37(1) refers only to such corporate social responsibility expenses as under section 135 of the Companies Act, 2013, and, as such, it cannot have any application for the period not covered by this statutory provision which itself came int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in the return of income and not before the lower authorities and this is for the first time the assessee has claimed this expenditure u/s 43B of the Act on the payment basis. 10. According to Ld. A.R this amount claimed by the assessee of Rs. 46,44,362/- was shown as advance in the balance sheet as on 31.03.2012 pertaining to this AY 2012-13. According to Ld. A.R this amount was paid as entry tax [UP Tax on entry of goods into the local areas, 2007]. The assessee challenged the Constitutional validity of this State Act by filing writ petition before the jurisdictional High Court in Writ Tax No. 1484 of 2007. In compliance with the Hon'ble High Court interim order in WP No. 2193 /2008 for the year 2008-09 to 2011-12 the bank guaran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as deduction the amount paid to the tune of Rs. 46,44,362/- to the UP State Government. It is noted that since the assessee had challenged the Constitutional validity of the entry tax in Hon'ble High Court/Supreme Court the assessee had not claimed deduction of entry-tax paid to UP Government in its return of income, but showed it as 'Advance' in the Balance-Sheet as on 31.03.2012. However since the Hon'ble High Court has upheld the Constitutional validity of the legislation, the assessee intends to claim the tax paid as deduction which was shown by it in its audited accounts under advance as discussed supra. The entry tax levied by the Govt. of UP is an allowable deduction u/s 43B sub-clause (a) of the Act provided the amount is remitted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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