TaxTMI 
TaxTMI 
2023 (10) TMI 1604
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....aluru (For short, 'the ITAT') which confirmed the order dated 22.03.2018 passed by the Appellate Commissioner, who in turn had confirmed the order of the Assessing Officer dated 11.03.2015 in relation to the appellant-Assessee for the assessment year 2012-13. 2. Heard learned senior counsel Sri M.V. Seshachala, for Sri Gangadhar J.M., appearing for appellant and learned counsel Sri Y.V. Raviraj appearing for respondents. 3. The material on record discloses that the appellant-Assessee is engaged in business of extraction of Iron-ore and Trading and filed his income tax returns for the assessment year 2012-13. Under the said returns, the appellant claimed exemption towards expenditure incurred by the appellant towards construction of ho....
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....dentical circumstances where houses were constructed for the State Government under similar contract should be allowed as a business expenditure under Section 37 of the I.T. Act." 7. A perusal of the material on record including the impugned orders will indicate that the same are contrary to the Judgment of this Court in the case of M/s. Kanhaiyalal Dudheria vs. Joint Commissioner of Income Tax and Another, reported in (2019) 310 CTR 0617 (Kar), wherein it is held that business expenditure incurred would be entitled for deduction under Section 37(1) of the IT Act. In the said Judgment, it is held as under : "28. In the light of the analysis of the case laws above referred to, it cannot be gain said by the revenue that contributi....
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....Government of Karnataka was on account of the clarion call given by the then Chief Minister of Karnataka in the hour of crisis to all the Philanthropist, industrial and commercial enterprises to extended their whole hearted support and the entire logistic support has been extended by the Government of Karnataka namely, providing land and design of the house to be constructed, approval of layout and to take care of all local problems. Infact, the State Government had also agreed to exempt such of those persons who undertake to execute the work from the purview of sale tax, royalty, entry tax and other related State taxes and is said to have extended to the appellant also. In this background it cannot be construed that MOU entered into betwee....
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....g officer would be required to allow such expenditure under Section 37(1) of the Act and not otherwise. 31. For the reasons aforestated, we are of the considered view that substantial question law formulated herein is to be answered in the negative i.e., against the revenue and in favour of the assessee. Hence, we proceed to pass the following: ORDER (i) I.T.A. Nos. 100016/2018 and 100017/2018 are allowed. (ii) Order dated 17.05.2017 passed by Income Appellate Tribunal, 'B" Bench, Bengaluru in ITA Nos. 782 & 1495/Bang/2016 for the assessment years 2011-12 and 2012-13 are set aside and appeals filed by the assessee before the Tribunal is allowed. (iii) Assessment proceedings of the yea....