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TMI Blog2021 (8) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... T:- The assessee has furnished copies of receipts given by the Association acknowledging receipt of ₹ 15.25 lakhs - All the receipts clearly show that the payment have been received by All India Gems Jewellery Trade Federation towards donation. The assessee has furnished a copy of application form for participating in the PMI programme - The payment was voluntary and not under compulsion. Even otherwise, as rightly pointed out by Ld. D.R., there is no material to show that the donation was made under compulsion. On the contrary, the above said extract taken from the application form show that the donation was given to the Federation recognising the value in its bringing not only to trade but also to education and well being of the community. Hence, it is clearly proved that the donation is a general donation made by the assessee to the association/federation. We confirm the order passed by Ld. CIT(A) on this issue. Appeal filed by the assessee is partly allowed. - ITA No. 141/Bang/2018 - - - Dated:- 10-8-2021 - SHRI B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER Appellant by : Shri Ravishankar S.V., A.R. Respondent by : Shri Kann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee will have enduring benefit. Accordingly, he submitted that the above said expenses have been rightly treated as capital expenditure by Ld. CIT(A). 7. We have heard rival contentions on this issue and perused the record. We notice that the assessee has incurred expenses for repairing the flooring, renovating the distributors and customers display area and waste mitigation and production process systems. The nature of expenses incurred by the assessee has been narrated by the A.O. as under:- a) Flooring Expenses: The building is about 15 years old and the flooring was laid out of mosaic tiles The wear and tear during the said years was obstructing the movement of men and material and affected our production. During the F.Y.2011-12 we have laid vitrified tiles for the entire production, administration and managerial area comprising of about 20,000 Sq.ft. The total expenditure incurred in this regard during the F Y 2011-12 amounts to Rs_2,83.478/- b) Renovation of distributors and customers display area; The turnover of the company has been increasing every year the volume of distributors customers have also increased. We cater to almost the entire c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Whereas, the Tribunal by relying on the decisions of our High court reported in (i) CIT v. Ayesha Hospitals (P.) Ltd. [2006] 292 ITR 266 (Mad) and (ii) ThiruArooran Sugars Ltd. v. Dy. CIT [,2013]32LIR 324/213 Taxman 90 (Mag,)/31taxmann.com 3 (Mad.), held the expenses incurred as revenue expenditure and accordingly allowed deduction on account of the same. For better appreciation, para 5.3 of the order of the Tribunal is extracted hereunder: 5.3. We have heard both the parties and carefully perused the materials available on record. It is apparent from the facts of the case it is not disputed that the expenditure were incurred towards fixing false ceiling, painting, electrical cabling and certain civil works etc., in the rented premises of the assessee. Various judicial authorities has held that in such circumstance the expenditure has to be treated as revenue expenditure. The assessee has relied in the following two cases :- (i) CIT v.Ayesha Hospitals Pvt. Ltd., [2006] 292 ITR 266 (Mad). Held : dismissing the appeal, that the assessee had spent a sum of ₹ 1,85,557/- towards painting, re-laying of the damaged floors, partitions, etc. The co- owners were t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sociation and it has participated in a programme called Perfect Manufacturer of India, 2011-13 (PMI) organised by the above said Federation. The assessee has paid a sum of ₹ 11.63 lakhs for participating in the above said programme. In addition to that, the assessee has also paid a sum of ₹ 15.25 lakhs to the federation as corpus donation. The Ld. A.R. submitted that since the All India Gems Jewellery Trade Federation is working for the interest of the business carried on by the assessee, there is business expediency in giving above said donation, i.e., it is for promoting business interest of the assessee. Accordingly, he submitted that the entire amount of donation given by the assessee is allowable as deduction u/s 37(1) of the Act. 12. With regard to the acceptance of the addition by the then Ld. A.R., the Ld. authorised representative submitted that the then Ld. A.R. has accepted the same without understanding the correct facts and law. The Ld. A.R. submitted that payment of donation was compulsory for participating in the PMI programme and hence there was no option for the assessee not to pay the said amount. Accordingly, he contended that the entire amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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