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Here is a labour intensive company in the case reported at (2022] 29 ITR (Trib)-OL 602 (ITAT[Chen]) which has in its memorandum other objects a clause authorising it to establish and carry on educational institutions schools colleges and it is on this basis that it claimed deduction of expenditure incurred on construction of primary and kindergarten school building in proximity to its factory located located in a rural belt . The school’s were run by associated charities. The tax authority held that the expenditure is not for business as the land on which school is constructed is not owned by the company and more like a case of donation. 

Calling it a labour welfare measure the Tribunal found that the school is meant to support the families of the labourers as per the suggestion made by the great patriotic leader late K. Kamaraj to take care of the children of the labourers who are working in the organization . The school was created to take care of full expenses of the children and to give education, stay, food, etc., up to fifth standard of those children if either they lost any one of the parents or both.

Education for all by far is the most important growth engine for any economy. The Government incur a sizeable amount on providing free primary school education in the country till class eight. Likewise it is also important that even corporates should be encouraged to shoulder this task. 

Like in this case the expenditure on construction of schools by corporates should also be allowed as deduction u/s37 in its entirety as welfare expenditure disregard of restriction on allowance of CSR expenditure by making an exception in the explanation therein. 

Let the next year budget roll out redeem on the suggestion of the great patriotic leader late K. Kamaraj. 

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