S. 37(1) — Business expenditure — Reimbursement of expenditure incurred in running the school — Whether allowable — Held, Yes.

7. 
   

   Tata International Ltd. v. ACIT

ITAT ‘I’ Bench, Mumbai

Before A. L. Gehlot (AM) and

Sushma Chowla (JM)

ITA No. 5591/M/2005

A.Y. : 1999-2000. Decided on : 11-9-2009

Counsel for assessee/revenue : Dinesh Vyas/

R. P. Meena

S. 37(1) — Business expenditure — Reimbursement of
expenditure incurred in running the school — Whether allowable — Held, Yes.

Per A. L. Gehlot :

Facts :

The assessee was engaged in the business of export. One of
the issues before the Tribunal was regarding the allowability of expenditure
incurred on the maintenance of a school run by TATA at Dewas. The school was
situated at the place where the assessee’s factory was located and substantial
number of students of the school were children of the assessee’s employees.
During the year the assessee had paid the sum of Rs.1,88,540 by way of
reimbursement, part of the expenditure incurred in running the School. The
same was disallowed by the lower authorities.

Held :

According to the Tribunal, the case of the assessee was
covered by the Tribunal decision in the assessee’s own case for the A.Ys.
1992-93, 1993-94 and 1994-95 which was later affirmed in the
assessee’s own case for the A.Ys. 1996-97 to 1998-99. Noting the fact that the
school was situated at the same place where the assessee’s factory was located
and substantial number of students of the school were children of the
assessee’s employees, the expenditure claimed was allowed.

Case referred to :

Tata International Ltd. ITA No. 4823 to 4825/M/2005 dated
26-3-2009.