2020 (11) TMI 318

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.....854/Chny/2013 on the file of the Income Tax Appellate Tribunal 'B' Bench, Chennai ('the Tribunal' for brevity) for the assessment year 2009-10. 2.This appeal has been filed by raising the following substantial questions of law:- Social and Community Welfare Expenses 1.Whether the Tribunal was right in law in remitting the issue to the assessing officer to adjudicate the issue of allowability of the expenditure applying the test of the commercial expediency with reference to the evidence on record ignoring the finding of CIT(Appeals) in paragraph 8.2 of his order that the assessee has furnished the particulars of the expenditure incurred towards community welfare? 2.Whether the expenses incurred....

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....d counsel appearing for the appellant and Mr.T.Ravikumar, learned Senior Standing Counsel appearing for the respondent. 4.The first set of substantial questions of law pertain to social and community welfare expenses. We have perused the finding recorded by the Tribunal in paragraph 44.1, which reads as follows: "44.1.Ground of appeal No.2 challenges the confirmation by the ld. CIT(A), the disallowance of social community welfare expenses. This issue was dealt by us in the Revenue's appeal for AY 2007-08 in ITA No.884/Chny/2013, wherein we remitted this issue to the file of AO for fresh adjudication on the touch stone of commercial expediency. Similarly, this issue for the year under consideration also, we remit this issue t....

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....reliance on the orders of his predecessor in the earlier years. The submission of the ld. Counsel that the expenditure was incurred only on the direction of the Government of Tamil Nadu cannot be accepted for the reasons that from the perusal of the letter of the Chief Secretary of Government of Tamil Nadu dated 27.01.2004 vide DO letter No.1044/Secy./2004-5, it is clear that the Government of Tamil Nadu had only extended an invitation to participate on the occasion of the sponsorship of the tennis tournament. This invitation cannot be construed as a mandatory direction of the Government of Tamil Nadu. The ratio of the decision of Hon'ble Jurisdictional High Court in the case of Cheran Transport Corporation Ltd. (supra) is not ....

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....ction. 8.This contention is opposed by Mr.T.Ravikumar, learned Senior Standing Counsel appearing for the respondent. It is submitted that the letter issued by the Government of Tamil Nadu has been held to be only intimation/invitation and that cannot be the sole reason for the appellant to claim the same as an expenditure under Section 37 of the Act. In support of his contention, the learned Senior Standing Counsel referred to the decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax vs. Malayalam Plantations Ltd. [(1964) 53 ITR 0140], wherein the Hon'ble Supreme Court held as follows: "8.The aforesaid discussion leads to the following result. The expression "for the purpose of the business" is ....