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TMI Blog2022 (11) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... enue has raised the following substantial questions of law for consideration: (i) Whether on the facts and circumstances of the case that the expenses incurred on the activities relating to CSR shall not be deemed to be an expenditure u/s 37 of the income Tax Act, 1961 which deals with allow ability of only such expenditure laid out wholly and exclusively for the purpose of business or profession and not otherwise ? (ii) Whether on the facts and circumstances of the case that the assessee company's claim of CSR expenses being part of 'Employees Welfare' as negotiated under National Coal Wage Agreement from time to time forms part of business expenditure, is bad in law and not in good fait of 'welfare' as substantiated by disallowability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee filed appeal before the Tribunal. On going through the order passed by the learned Tribunal, we find that the Tribunal has made an elaborate exercise to consider the factual matrix and noted that the assessee was bound to comply with the obligation. National Coal Wage Agreement which is a joint bi-partite agreement for the coal industries dated 15th July, 2005. That apart, the learned Tribunal has noted that similar expenses incurred by another public sector undertaking like that of the respondent/assessee namely, Southern Coal Fields, where relief was granted by the learned Tribunal in the case of Southern Coalfields vs. JCIT reported in 260 ITR (AT) 1. Accordingly, the appeal stood allowed. Aggrieved by the same, the revenue is before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mann.com 333 (Mad.) will aid the assessee's case, wherein the expenses incurred by the said assessee for maintenance of Thiruvalluvar statue at Kanyakumari was held to be allowable deduction under Section 37(1) of the Act. On more or less identical facts the High Court of Gujarat in the case of Commissioner of Income Tax vs. Gujrat Narmada Valley Fertiliser and Chemicals Ltd. reported in [2020] 121 taxmann.com 82 (Guj.) dismissed the revenue's appeal affirming the relief granted to the assessee therein by the learned Tribunal. In the said case the question was whether the assessee-company, a State Government undertaking, which had incurred expenses towards contribution/donation made to educational institution, trusts, local bodies for disch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immensely beneficial to refer to the decisions of the hon'ble Supreme in the case of S.A. Builders Ltd. vs. Commissioner of Income Tax reported in [2007] 158 Taxman 74 (SC) wherein it was held that an expenditure made may not have been incurred under any legal obligation, yet it is allowable as business expenditure if it is incurred on the ground of commercial expediency. The facts of the case on hand is much better as there was a legal obligation on the part of the respondent/assessee to incur such expenses. Thus, we find that the learned Tribunal rightly allowed the assessee's appeal and granted relief. Accordingly, appeal filed by the revenue (ITAT/155/2022) is dismissed and the substantial questions of law are answered against the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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