The Hindu : Karnataka / Bangalore News : Court's poser to Government

Online edition of India's National Newspaper
Friday, Jun 09, 2006

Karnataka

Karnataka - Bangalore

Court's poser to Government

Staff Reporter

Infosys had contributed money to the police to regulate traffic

BANGALORE: The Karnataka High Court on Thursday sought to know from the State Government how it could receive money from Infosys Technologies Limited, Bangalore, on behalf of the Bangalore police for regulating traffic on Hosur Road.

A Division Bench comprising Justice R. Gururajan and Justice Jawed Rahim also ordered the State Government to be impleaded as a party on an appeal by the Department of Income Tax (IT) challenging an order by the IT Appellate Tribunal.

In its appeal, the IT Department said that its assessing officer decided to scrutinise the assessment of Infosys.

The IT company wanted the assessing officer to consider the expenditure incurred by it in foreign currency when computing deduction under 89 HHE of the Income Tax Act.

The assessing officer, however, rejected the claim.

Infosys said it had contributed Rs. 6.93 lakh to the Bangalore police for regulating traffic on Hosur Road.

It claimed the amount as expenditure under Section 37 of the Act. The assessing officer, in his order, held that it was the duty of the police to regulate traffic.

Infosys preferred an appeal to the Commissioner of Income Tax (Appeals) against the assessing officer's order. The commissioner upheld the order of the assessing officer.

Infosys appealed against the commissioner's order to the IT Appellate Tribunal. The tribunal on March 31, 2005 allowed the appeal and set aside the order of the assessing officer.

The Bench adjourned further hearing on the case.

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