Company, though an Artificial Juridical Person, is Eligible for Deduction for Pooja Expenses: ITAT [Read Order]

Raipur bench of Income Tax Appellate Tribunal (ITAT) recently in the case of M/s.Shree Radhe Industries, held that through a Company is an artificial juridical person, it is eligible for deduction under the Income Tax Act for pooja expenses.

In the present case, the assessee company has duly filed its return of income and also claimed the deduction at Rs.1,11,442 for pooja expenses.

During the assessment proceedings the Assessing Officer (AO) has allowed a rebate of Rs.27,834 relatable to Diwali and Vishwakarma festival, and disallowed Rs.1,11,442 and also added the same to the income of the assessee by holding that the assessee company being an artificial juridical person, the pooja expenses is inadmissible.

On appeal CIT(A) also confirmed the addition made by the AO. Thereafter, assessee approached the Tribunal against the order passed by the authority.

Before the Tribunal, the assessee submitted that no monetary limit has been assigned to claim pooja expenses which are invariably incurred in the business premises for the purpose of business. And further contended that the expenses are incurred to boost the morale of the employees and to motivate them to devote their duties for the best interest of the company.

After analyzing the above narrated facts deeply, the tribunal bench comprising of Judicial Member Pavan Kumar Gadale and Accountant Member N.S Saini jointly objected the findings of the lower authorities and observed that the allowability of pooja expenses is required to be considered for specific purpose in order to bring peace and harmony amongst the labour-oriented factory which involves various sentiments and religious fervor.

The division bench further observed that the assessee incurred some expenses to motivate the morale of the employees to perform various religious activities in the factory premises also. Therefore, the assessee company in the present case would eligible to get the deduction on account of pooja expenditure even though the company being an artificial juridical person.