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| The Tax Publishers2021 TaxPub(DT) 4088 (Bang-Trib) INCOME TAX ACT, 1961
Section 37(1)
In view of decision rendered by Tribunal in the case of Veerabhadrappa Sangappa & Co. [ITA No. 1054/Bang/2019 Order, dated 8-12-2020 : 2021 TaxPub(DT) 135 (Bang-Trib)], 15% of sale proceeds in respect of mines retained towards Special Purpose Vehicle as an allowable business expenditure
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Business expenditure - Allowability - Deduction of 15% of sale proceeds retained towards Special Purpose Vehicle -
Assessee was into the business of mining. It contended that the amount retained at 15% of the sale proceeds and remitted to a separate account with the Special Purpose Vehicle (SPV) by CEC which, took control of mining, processing, production and sale of iron was an allowable expenditure as the amount so retained was not for violation of any law in force or towards any penalty and accordingly not covered by Explanation 1 of section 37.Held: Tribunal in the case of Veerabhadrappa Sangappa & Co. [ITA No. 1054/Bang/2019 Order, dated 8-12-2020 : 2021 TaxPub(DT) 135 (Bang-Trib)], on identical facts had allowed deduction of 15% of sale proceeds in respect of mines retained towards SPV as an allowable business expenditure. Following the same, 15% retained in the case of assessee by CEC was an allowable business expenditure.
Followed:Veerabhadrappa Sangappa & Co. [ITA No. 1054/Bang/2019 Order, dated 8-12-2020 : 2021 TaxPub(DT) 0135 (Bang-Trib)].
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2013-2014 to 2015-2016
INCOME TAX ACT, 1961
Section 37(1)
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