1981 (8) TMI 150

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....nd 1977-78. The assessee is a fully owned State Government undertaking, engaged in the business of road transport. The assessee contributed Rs. 1,48,000 for the assessment year 1976-77 and Rs. 7,500 (inclusive of flag day fund) for the subsequent assessment year 1977-78 to the Tamil Nadu Chief Minister's Drought Relief Fund. The ITO with whom the Commissioner (Appeals) agreed, disallowed it as a d....

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....ver, that is not very material to decide the appeal. The assessee cited Addl. CIT v. Kuber Singh Bhagwandas [1979] 118 ITR 379 (MP)(FB) in support of his stand of commercial expediency. But there the assessee is a private enterprise and not a Government undertaking in the public sector, like the one before us. So that decision is distinguishable on that ground and on the basis of certain other fac....

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.... will be able to carry on their trade smoothly and profitably. But that is not the case with fully owned Government undertaking. They need not and should not entertain any such ideas like the private trade. They are, though a trading concern, really the government itself. Their activity of road transport is only another form of governmental activity. The executive official who sponsored the fund m....

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....ed wholly and exclusively for the purpose of business. If the assessee were in the private trade, very likely we would have allowed the expenditure under commercial expediency. But that does not exist for a public sector undertaking. These contributions made by a public sector undertaking as a trading concern do not contribute either to the benefit or the non-contribution or non-co-operation to th....