By Mr v. Chandrashekar, Advocate

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2/7TH DAY OF JANUARY 2022 PRESENT| THE HON’BLE MR. JUSTICE ALOK ARADHE AND| THE HON’/BLE MR. JUSTICE M.G.S. KAMAL 1LT.A. NO.589 OF 2019 BETWEEN: PRINCIPAL COMMISSIONER OF INCOME TAX-3.BMTC COMPLEX, KORAMANGALA.BENGALURU-5600 34. (BY MR. E.I. SANMATHI, ADVOCATE) — ADPELLANT AND* M/S. MYSORE MINERALS LTD.,NO.39, M.G. ROADBENGALURU-560001|PAN: AACCM 28/73L (BY MR. V. CHANDRASHEKAR, ADVOCATE) ~. RESPONDENT THIS I.T.A. IS FILED UNDER SEC. 260-A OF INCOME TAX|ACT 1961, ARISING OUT OF ORDER DATED 25.01.2019 PASSEDIN ITA NO.464/BANG/2014 FOR THE ASSESSMENT YEAR 2009-10,PRAYING TO: | (i) DECIDE THE FOREGOING QUESTION OF LAW AND/OR-SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BYTHE HON BLE COURT AS DEEMED FIT.| (ii) SET ASIDE THE APPELLATE ORDER DATED 25.01.2019|PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, B BENCH,BENGALURU, LN|APPEAL|PROCEEDINGSIN|LIA NO.464/BANG/2014 (ANNEXURE-A) FOR THE ASSESSMENT YEAR.2009-10 AS SOUGHT FOR IN THIS APPEAL; AND TO GRANT SUCHOTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE. THIS I.7T.A. COMING ON FOR’ HEARING, THIS’ DAY, |ALOK ARADHE J.,DELIVERED THE FOLLOWING: | JUDGMENT This appeal under Section 260-A of the Income Tax Acthas been filed the revenue against the order dated25.01.2019 passed by the Income Tax Appellate Tribunal Thesubject matter of the appeal pertains to Assessment Year2009-10. The appeal was admitted on following substantial|questions of law: (i)|Whnetner on the facts and circumstances ottne case and in law, the Tribunal is justified in)treating the donation given to Bellary DC for|construction Of ringroadISanallowableexpenditure under Section 37 of tne Act? (il)Whether on the facts and circumstances of tne case and in law, the Tribunal is rignt in law in-allowing the expenditure under Section 37 thougn.the basic conditions of Section 37(b) expenses is of revenue nature and 3/7(c) expenses have beenexpended wholly and exclusively for the purpose ofthe business are not fulfilled?| 2. Facts giving rise to filing of this appeal briefly stated are that the assessee is a company engaged in the pDusiness of extraction of minerals such as bauxite and |imestone etc.The assessee filed the return of Income for the Assessmentyear 2009-10. The Assessing Officer passed an order ofassessment on 30.12.2011. Tne aforesaid order was setaside by the Commissioner of Income Tax by an order dated29.01.2014 passed under Section 263 of the Act. Tneassessee filed an appeal before the tribunal. The tribunal byan order dated 25.01.2019 nas partly allowed the appeal. | 3. We nave heard learned counsel for the parties atlength. The substantial questions of law involved in thisappeal Nave already been answered in favour of the assesseeby Supreme Court in"SRI,AVENKATA SATYANARAYANARICE MILL CONTRACTORS CO. VS. COMMISSIONER OFINCOME TAX, 137 ITR 267. Para 10 of the judgment|reads as under: From the aforesaid discussion it follows|that any contribution made by an assessee to apublic welfare fund which is directly connected|or related with the carrying on of the assessee'sbusiness or wnhicn results in the penefit to theassessees Dusiness has to be regarded as an 3. We nave heard learned counsel for the parties atlength. The substantial questions of law involved in thisappeal Nave already been answered in favour of the assesseeby Supreme Court in"SRI,AVENKATA SATYANARAYANARICE MILL CONTRACTORS CO. VS. COMMISSIONER OFINCOME TAX, 137 ITR 267. Para 10 of the judgment|reads as under: From the aforesaid discussion it follows|that any contribution made by an assessee to apublic welfare fund which is directly connected|or related with the carrying on of the assessee'sbusiness or wnhicn results in the penefit to theassessees Dusiness has to be regarded as an allowable deduction u/s 37(1) of the Act. Such a)donation, whether voluntary or at the instanceof the authorities concerned, when made to aChief Ministers Drougnt Relief Fund or a District:Welfare|FundestablisnedDytheDistrictCollector or any other Fund for the benefit of the’public and with a view to secure benefit to theassessees business, cannot be regarded aspayment opposed to public policy. It is not as ifthe payment in tne present case nad been madeas an illegal gratification. There is no law whichprohibits the making of such a donation. Themere fact that making of a donation forCharitable or public cause or in public interestresults in the government giving patronage orbenefit can be no ground to deny the assessee adeduction of that amount u/s 37(1) of the Actwhen such payment had been made for the)purpose of assessee’s business. The aforesaid decision of the Supreme Court was.followed by this court vide judgment dated 17.03.2021passed in ITA NO.460/2017 (P,.R. COMMISSIONER OFINCOME TAX-4 AND ANOTHER VS. KARNATAKA STATEINDUSTRIALINFRASTRUCTUREDEVELOPMENT CORPORATION LTD.) and other connected matters. In view. Of decisionof|the.SupremeCourtIn,SRI.VENKATASATYANARAYANA RICE MILL CONTRACTORS CO. as well asadivision bench of this court in the judgment dated|17.03.2021 passed in ITA NO.460/2017, the substantial|questions of law are answered against the revenue and infavour of the assessee. In the result, the appeal fails and is hereby dismissed. Sd/-JUDGE Sd/-JUDGE