Notional rental value can count as canteen expense where it reflects premises cost for subsidy-linked tax exemption

For a subsidy-based tax exemption tied to expenditure on running a canteen, the electricity charges were properly treated as actual operating expenses. The notional rental value of the assessee's own building was also includible because it represented the cost of occupying premises that would otherwise have been rent if the canteen had been run from a leased building. On that basis, both items formed part of the canteen expenses for computing whether the 25 per cent subsidy requirement was satisfied, and the Tribunal was held to have committed no error of law.

---

---

Issues: Whether the estimated rental value of the assessee's own building and the electricity charges formed part of the expenses incurred in running the canteen for the purpose of determining eligibility for exemption under the relevant Government Order.

Analysis: The electricity charges were actually incurred and were properly taken into account. The estimated rental value of the assessee's own building, though not paid as rent, represented the notional cost of occupying premises for the canteen; if a leased building had been used, rent would have been an expense in running the canteen. For computing the subsidy requirement under the Government Order, such value could therefore be included in the total expenses.

Conclusion: The Tribunal committed no error of law in treating both items as part of the canteen expenses for the purpose of calculating the 25 per cent subsidy requirement.

Ratio Decidendi: For the purpose of a subsidy-based tax exemption tied to expenditure on running a canteen, notional rental value of premises used by the assessee may be treated as part of the expenses incurred where it represents the cost of providing the premises for the canteen.

---