Principal Commissioner Of Income-tax, Jaipur-II, Jaipur v. Rajasthan State Industrial Development And Investment Corporation Ltd - 2019-LL-0916-143

Citation	2019-LL-0916-143
Appellant Name	Principal Commissioner Of Income-tax, Jaipur-II, Jaipur
Respondent Name	Rajasthan State Industrial Development And Investment Corporation Ltd.
Court	HIGH COURT OF RAJASTHAN
Relevant Act	Income-tax
Date of Order	16/09/2019
Judgment	View Judgment
Keyword Tags	admissibility of deduction • state renewal fund
Bot Summary:	The sole question for consideration is the admissibility of deduction under Section 37(1) of the Income Tax Act, 1961 2. It is not disputed that the issue with respect to contribution made to the State Removal Funds is covered by the decision in Pr. Commissioner of Income Tax v. M/s. Rajasthan Renewable Energy Corporation Ltd. ITA No.10/2018 decided on 13.03.2018. The court had hen followed Principal Commissioner of Income-Tax V. Rajasthan State Seed Corporation Ltd 386 ITR 267 and held, as under:- Insofar as the expenditure incurred on State Renewal Fund is concerned, said expenditure also goes to show that the renewal fund was set up by the State Government and was created with the object of providing a safety net for the workers likely to be effect by restricting in the State Public Enterprise and that a finding of fact has been recorded that the contribution made to the State Renewal fund is solely for the purposes of the welfare and benefit of the employee. In our view, it is for the assessee to decide whether any ITA-244/2018 expenditure should be incurred in the course of business and expenditure of this nature being for business expediency is certainly allowable deduction under Section37, of the Act. In our view any normal employee expenditure for the welfare and benefit of employees is allowable expenditure under Section 37, the Tribunal has come to a finding of fact that it was a legal obligation of the respondent- assessee towards contribution of the said amount to the State Renewal fund and there being a legal obligation as well in our view the Tribunal has come to a correct conclusion. Following the same reasoning it is held that the expenditure i.e. contribution towards State Renewal Fund, is covered and allowable under Section 37 of the Act. For the above reasons, this appeal too is dismissed.

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No.244/2018 Principal Commissioner Of Income Tax Jaipur-II, Jaipur Appellant Versus M/s Rajasthan State Industrial Development And Investment Corporation Ltd, Udhyog Bhawan, Tilak Nagar, Jaipur Respondent For Appellant(s) : Mr. Prateek Kedawat, Mr. Hitesh Mishra and Mr. Ankit Papli on behalf of Mr. R.B. Mathur For Respondent(s) : HON'BLE CHIEF JUSTICE HON'BLE MR. JUSTICE PRAKASH GUPTA Judgment 16/09/2019 1. sole question for consideration is admissibility of deduction under Section 37(1) of Income Tax Act, 1961? 2. It is not disputed that issue with respect to contribution made to State Removal Funds is covered by decision in Pr. Commissioner of Income Tax v. M/s. Rajasthan Renewable Energy Corporation Ltd. [ITA No.10/2018 decided on 13.03.2018]. court had hen followed Principal Commissioner of Income-Tax V. Rajasthan State Seed Corporation Ltd [(2016) 386 ITR 267 (Raj) and held, as under:- Insofar as expenditure incurred on State Renewal Fund is concerned, said expenditure also goes to show that renewal fund was set up by State Government and was created with object of providing safety net for workers likely to be effect by restricting in State Public Enterprise and that finding of fact has been recorded that contribution made to State Renewal fund is solely for purposes of welfare and benefit of employee. In our view, it is for assessee to decide whether any (2 of 2) [ITA-244/2018] expenditure should be incurred in course of business and expenditure of this nature being for business expediency is certainly allowable deduction under Section37 (1), of Act. In our view any normal employee expenditure for welfare and benefit of employees is allowable expenditure under Section 37 (1), Tribunal has come to finding of fact that it was legal obligation of respondent- assessee towards contribution of said amount to State Renewal fund and there being legal obligation as well in our view Tribunal has come to correct conclusion. Following same reasoning it is held that expenditure i.e. contribution towards State Renewal Fund, is covered and allowable under Section 37 of Act. 3. For above reasons, this appeal too is dismissed. (PRAKASH GUPTA),J (S. RAVINDRA BHAT),CJ Anil Goyal/47 Principal Commissioner Of Income-tax, Jaipur-II, Jaipur v. Rajasthan State Industrial Development And Investment Corporation Ltd

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