Section 40A(9) — the law in short
What the courts have decided on section 40A(9), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Tata Power Co Ltd v ACIT
ITATHelps taxpayerValidity unconfirmed
The Assessing Officer has disallowed our contribution to a local school under s.40A(9) because it is a payment to an institution. Does s.40A(9) really catch staff welfare spending of this kind?
Not on these facts. The Mumbai Tribunal held that payments to local schools near the company's remote generating stations, where the employees' children study, are a staff welfare measure and are deductible, following the jurisdictional Bombay High Court in PCIT v State Bank of India. The disallowance of Rs 38,85,333 under s.40A(9) was deleted.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.