T.D. POWER SYSTEMS LIMITED,BANGALORE vs. DCIT, BANGALORE

Date of hearing : 25/09/2017 Date of pronouncement : 22/12/2017 O R D E R

Per INTURI RAMA RAO, AM :

3. The only issue in the present appeal is whether an amount of contribution of Rs.15,44,850/- made to Japanese Red Cross Society towards Tsunamy victim relief in Japan is allowable deduction or not. It was claimed that this contribution was made by the Japan Branch of the company and it is an allowable expenditure u/s 37 of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short]. In this connection, reliance was placed on the decision of the Hon’ble Supreme Court in the case of Sri Venkata Satyanaraya Rice Mills Contractors Co. vs. CIT (223 ITR 101). The AO disallowed the claim.

4. On appeal before the CIT(A), the same came to be confirmed as the expenditure was incurred outside India.

5. We heard rival submissions and perused the material on record. The issue in the present appeal is whether the amount of contribution made to Red Cross Society, Japan is an allowable expenditure while computing income under the head ‘business income’. It is claimed that the contribution was made by Japan branch of the assessee and it is not clear from the record whether any profits earned by Japan Branch of the appellant or not. Even if so, no evidence was brought on record as to how the contribution had benefited the business operations of the branch of the assessee-company and mere reliance on the judicial decision without laying factual foundation does not come to the rescue of the assessee. Therefore, claim made by assessee cannot be allowed.