COMMISSIONER OF INCOME TAX Vs. RAJASTHAN SYNTEX LTD.

JUDGEMENT

(1.) THIS appeal is directed against order dt. 30th Oct., 2007 passed by the Income -tax Appellate Tribunal, Jodhpur Bench, Jodhpur (in short 'the Tribunal' hereinafter) in ITA No. 227/Jd/2004, whereby the appeal of the assessee company for the asst. yr. 1998 -99, against the order dt. 16th March, 2004 passed by the Commissioner of Income -tax (Appeals), Udaipur [in short the CIT(A)' hereinafter], confirming the disallowance of Rs. 20,00,000 being contribution given to the trust by the assessee company for the construction of the school building and amount of Rs. 12,000 given by way of contribution to SRSL Employees Welfare Fund, has been allowed and the donation given by the assessee company as aforesaid, has been treated to be business expenditure within the meaning of Section 37 of the IT Act, 1961 (for short 'the Act of 1961' hereinafter).

(2.) THE relevant facts in nutshell are that the assessee company made donation of Rs. 20,00,000 to the SRSL Charitable Trust for construction of school building, similarly, an amount of Rs. 12,000 was given by way of contribution to the SRSL Employees Welfare Fund. The deduction claimed was disallowed by the learned AO in view of the provisions of Section 40A(9) of the Act of 1961, which was confirmed by the learned CIT(A) vide order dt. 16th March, 2004.

(3.) AS a matter of fact, the questions raised in this appeal stand covered by the decision of the Division Bench of this Court in the matter of CIT v. Rajasthan Spg. and Wvg. Mills Ltd. (2005) 198 CTR (Raj) 96, wherein while dealing with the question of claim to deduction of an amount spent by the assessee in purchasing of a bus for the purpose of welfare of the children of the staff/workmen of the company as a part of employees welfare measure was treated to be business expenditure.