TaxTMI 
TaxTMI 
1973 (11) TMI 7
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....ere allowable under section 37?" It will appear from the frame of the question that it is admitted that there were contributions by the assessee to the political parties through the Punjab Motor Union, Chandigarh, and the only question is whether they were allowable deductions. The assessee is a transport company. Its route permits were to expire on June 30, 1969. There was a threat of complete nationalisation of the transport business and in this connection reference may be made to the Notification No. 12748-IHT-69, dated 19th November, 1969, Transport Department, published in the Punjab Gazette (Extraordinary), dated November 19, 1969. The relevant clauses of the notification are 2, 3, 4 and 6 and are quoted below : "2. (a) All f....
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....shall have effect for a period of seven years from the date of publication of this notification in the Official Gazette, whereafter one-third of the operations of the private operators shall be taken over by the Punjab Roadways each year." In the face of this, the transporters formed a common forum to prevent nationalisation. This forum was styled as the Punjab Motor Union. According to the assessee, all the transporters contributed funds to that forum and that forum donated the money so collected to different political parties. It is stated by the assessee that these parties exercised their weight with the Government and ultimately the total nationalisation was prevented. The assessee got an extension of seven years for its route permit....
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....nt Ltd. v. Commissioner of Income-tax, the facts were as follows : "The assessee claimed deduction of Rs. one lakh contributed to the Congress party as, an expenditure laid out wholly and exclusively for the purposes of its business claiming (i) that its factory was situated at a place far away from Calcutta and other places and the supply of coal, packing bags and cement entailed problems which were solved by the Government ruled by the Congress party and (ii) that the Government had given to the assessee an interest free loan of Rs. 50 lakhs and had also subscribed for Rs. 40 lakhs worth of preference capital in the company and had also agreed to buy the entire cement for the Hirakud Dam and since the Congress party was the ruling part....
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....pended. Beyond this all other material facts bearing on the matter have been accepted by the Tribunal. These facts we have already set out earlier. The further fact is also there that the assessee was granted extension for a period of seven years after the expiry of the route permits on 30th June, 1969. Thus, there is a clear connection between the contribution and the business of the assessee because it got over the notification that was issued on 19th November, 1969. On these facts, the only irresistible conclusion is that the expenditure was wholly incurred to save the business from annihilation. The view we have taken finds ample support from the decision of the Delhi High Court in Delhi Cloth and General Mills Co. Ltd. v. Commissioner ....
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....ut if the Bill had been allowed to become a law the threat would have been real. As there was lot of agitation in favour of the Bill, it was circulated for eliciting public opinion and it transpired that one of the ways was not to impose a total ban on the manufacture of vanaspati ghee but also to make a provision for compulsory colourisation of vanaspati. That would have impaired the trade, although there would have been no complete ban on its manufacture and sale. In order to preserve the status and reputation of vanaspati ghee industry if propaganda had to be carried on it cannot be said that the expenditure of money was not exclusively laid out for the business of the company.... In the present case, there can be no doubt that the ex....