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TMI Blog2019 (7) TMI 1853X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the AO in this regard. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned order of the CIT(A) for upholding the disallowance of the assessee's contribution to the Federation of Indian Mineral Industries (FIMI) of an amount of ₹ 25,00,000/-, without appreciating the fact that the said sum was incurred on grounds of commercial expediency and accordingly allowable expenditure under section 37(1) of the Act. The learned AR was heard in support of the grounds raised (supra) and reiterated the assessee's submissions put forth before the authorities below. In support of the assessee's contentions, the learned AR placed reliance on the decision of the ITAT - Delhi Bench in the case of Rio Tinto India Pvt. Ltd., Vs. ACIT in ITA No. 363/Del/2012 dated 22.06.2012; wherein on the similar issue o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndian Mining Industries Building Fund. To a query by the AO during the course of assessment proceedings, the assessee replied that Federation of Indian Mining Industries was engaged in liaisoning with various Government bodies on mining related issues and since it provides support to mining industries and the assessee is rendering services to the mining industries, the expenditure was wholly and exclusively incurred for the purpose of business. However, the AO did not accept the submissions of the assessee on the ground that the assessee failed to establish that expenditure was incurred wholly and exclusively for the purpose of business. Inter alia, the AO relied upon decision in CIT Vs. Chandulal Keshavlal & Co. (1960) 38 ITR 601 (SC) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the amount conferred enduring benefit to the assessee, spread over a number of years and thus, could not be allowed as revenue expenditure. 17. We have heard both the parties and gone through the facts of the case as also the aforesaid decisions relied upon by the ld. AR. As is apparent from the aforesaid facts, an amount of ₹ 50,00,000/- has been contributed towards building fund of Federation of Indian Mineral Industries, the assessee being one of the members of the said Federation. The ld. CIT(A) treated the amount in the nature of donation and capital in nature. Whether the amount is revenue or capital in nature, Honble Apex Court in K.T.M.T.M. Abdul Kayoom v. CIT. 44 ITR 689 (SC) held that each case depends on its own fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue expenditure and the fact that the scheme was not for any temporary or particular duration makes little difference to the nature of the expenditure. In Rajasthan Spinning and Weaving Mills Ltd(supra) contribution to the export promotion fund made by the assessee for promoting its business interest by augmenting exports was held to be incurred and laid out wholly and exclusively for the purpose of the assessee's business. In L.H. Sugar Factory and Oil Mills P. Ltd. v. CIT [1980] 125 ITR 293 (SC) the Hon'ble Supreme Court allowed the contribution made by a sugarcane factory for construction of a road, at the request of the District Collector. Following this decision, Hon'ble Kerala High Court in Co-operative Sugars Ltd. (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribution towards building fund of the said federation, is for commercial consideration and it is not incurred for the purpose of securing any capital assets. In the light of view taken in the aforesaid decisions, we are of the opinion that contribution towards building fund of Federation of Indian Mineral Industries, of which the assessee is a member, has been incurred with a view to obtaining a commercial advantage and is allowable as revenue expenditure. In view thereof, ground No. 4 in the appeal is allowed." 3.4.3. Respectfully following the above cited decision of the ITAT - Delhi Bench in the case of Rio Tinto India Pvt. Ltd., Vs. ACIT (supra), we uphold the assessee's claim for the expense of ₹ 25 lakhs paid as contr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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