TaxTMI 
TaxTMI 
2018 (6) TMI 538
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.... holding that the employees' contribution to PF & ESI are governed by the provisions of Section 43B and not by section 36(1)(va) r.w.s. 2(24)(x) of the Income Tax Act, 1961. iv) Whether on the facts and in the circumstances of the case and in law, the CIT (Appeals) was justified in deleting the addition of Rs. 2,00,00,000/- made by the AO by disallowing contribution of Energy Conservation Fund. v) The appellant craves its rights to add, amend or alter any of the grounds on or before the hearing. 2. Ground No. 1 is regarding the addition made by the AO on account of contribution of State Renewal Fund was deleted by the ld. CIT (A). 3. We have heard ld. D/R as well as the ld. A/R and considered the relevant material on record. The assessee company has debited a sum of Rs. 20,00,000/- as contribution to State Renewal Fund in the Profit & Loss account. The AO disallowed the said amount on the ground that it is not covered under the provisions of section 37(1) of the IT Act. On appeal, the ld. CIT (Appeals) has allowed the claim of the assessee by following the earlier orders for the assessment years 2011-12 and 2012-13. At the outset, we note that this Tribunal in assessee's own ....
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....case amount was provided for the benefit of the employees. In view of this the contribution made to State Renewal Fund is allowable u/s 37(1)." 5. In D.B Appeal No. 4/2006 dated 29.04.2016, the Hon'ble Rajasthan High Court in case of Principal CIT vs Rajasthan State Seed Corporation Ltd has held as under: "9. 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 effected 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 employees. In our view, it is for the assessee to decide whether any expenditure should be incurred in the course of business and expenditure of this nature being for business expediency is certainly allowable deduction under section 37(1) of the Act. In our view, any normal expenditure for the welfare and benefit of employees is allowable expenditure under section 37(1), the Tribunal has come to a finding of fact ....
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....me, CIT(A) has rightly deleted the addition and thus the ground of the department be dismissed: -CIT Vs. State Bank of Bikaner & Jaipur (2014) 363 ITR 70 (Raj) -CIT Vs. Jaipur Vidyut Vitran Nigam Ltd. (2014) 363 ITR 307 (Raj) -CIT Vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. (2014) 366 ITR 163 (Raj) 8. The relevant finding of the ld CIT(A) is reproduced as under:- "3.3 I have perused the facts of the case, the assessment order and the submissions of the appellant. Admittedly, contribution to PF has been paid by the appellant, in all instances, before the due date of filing the return of income u/s 139(1). This fact is therefore, not in dispute. In view of the judgments of the Rajasthan High Court in the case Jaipur Vidhyut Vithran Nigam Ltd, 265 CTR 62 (Raj.), CIT Vs. State Bank of Bikaner & Jaipur (2014) 99 DTR 131 (Raj.), and other case laws on this issue, the claim of the appellant is allowable. Accordingly, this disallowance made by the Assessing officer, is directed to be deleted. This ground is allowed." 9. In the present case, admittedly, employees's contribution to PF amounting to Rs. 124,442 for the month of August 2010 has been paid by the appellant on ....
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....tion made to a statutory fund is allowable as deduction as held by Supreme Court in case of CIT Vs. New Horizon Sugar Mills Pvt. Ltd.269 ITR 397 where it was held that amount set apart towards molasses storage reserve fund is to be excluded from assessee's total income on the principle of diversion of income by overriding title. In view of above, CIT(A) has rightly deleted the disallowance and thus the ground of the department be dismissed. 93. The relevant finding of the ld. CIT(A) are reproduced as under:- " 5.3 I have perused the facts of the case, the assessment order and the submissions of the appellant. The fact of this issue is similar to the fact in assessee's own case for the assessment year 2008-09, appeal No. ITA No. 983/JP/2013. This issue has been decided in favour of the assessee as follow:- "This amount was paid towards energy conversation contribution fund, which is statutory liability as per provisions of Energy Conservation Act, 2001. The case law relied by the assessee of the judgment of the Hon'ble jurisdictional High Court in the case of CIT Vs. Raj Shipping and Weaving Mills Ltd. (supra) is squarely applicable in the case of the assessee wherein it ha....
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.... assessee received a sum of Rs. 16.77 crores as registration fees from various entrepreneurs for setting renewable energy plants. Only an amount of Rs. 3.50 lacs is incurred for topographic survey which is also a part of its business activity. Hence, the expenditure incurred by the assessee on advertisement is wholly & exclusively for the purpose of business and the same is allowable u/s 37(1). In view of above, ld CIT(A) has rightly deleted the disallowance and thus the ground of the department be dismissed 102. The relevant finding of the ld. CIT(A) are reproduced as under:- "7.3 I have perused the facts of the case, the assessment order and the submissions of the appellant. The Assessing Officer has made the disallowance under this head as he found that the expenditure had been incurred for topographic survey, recruits members, technical investigations, printing of energy policy and inviting tenders etc. and was of the opinion that this seemed in the nature of new business development and exploration of business opportunity. Further, it was also felt that this expenditure had increased exceptionally during the year almost 4 times. In the present proceedings, the AR in h....