2010 (11) TMI 73 - HC - Income Tax

Court upholds deduction of lease rentals and Molasses Reserve Fund contributions as business expenditure

The High Court of Allahabad upheld the Income Tax Appellate Tribunal's decision allowing lease rentals as a deduction and considering contributions to the ... Lease agreements - genuine transaction and as such the lease rentals paid by the assessee is an allowable deduction - contribution made to Molasses Reserve Fund is a statutory fund - Held that: - there is no illegality in the Lease agreements - as the contribution made to Molasses Reserve Fund is a statutory fund is concerned, it covered by the judgment of the Supreme Court in the case of Commissioner of Income Tax V. New Horizen Sugar Mills (P) Ltd. (2002 -TMI - 40368 - SUPREME Court) - Appeal is dismissed The High Court of Allahabad dismissed an appeal against the Income Tax Appellate Tribunal's order for the assessment year 1999-2000. The Tribunal found lease agreements genuine and allowed lease rentals as a deduction. Contribution to Molasses Reserve Fund was considered a statutory fund and deductible as business expenditure. The Tribunal's decision was upheld based on legal precedent, leading to the dismissal of the appeal.