TaxTMI 
TaxTMI 
2004 (9) TMI 10
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....e purpose of the assessee's business. The assessee has donated a bus valuing Rs. 5,12,000 to Vivaknand Kendriya Vidhyalaya, Hurda, where the children of employees of the assessee-company are receiving education. The amount spent for purchasing the bus had been debited to the Workmen and Staff Welfare Account and it was claimed as expenses incurred wholly and exclusively for the purpose of the assessee's business as deduction under section 37(1) of the Income-tax Act, 1961 as a revenue expenditure. The Assessing Officer was of the view that since the school is not owned by the company nor it runs under direct control of the assessee-company, and the entry is also not restricted to the wards of workmen and staff members of the company, it ....
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....m to deduction of any amount spent by the assessee as revenue expenditure incurred or laid out wholly and exclusively for the purpose of the assessee's business is not to be decided in the light that the assessee must be entitled to the whole benefit accruing from such expenses and nobody else should be sharing this benefit as is derived by the assessee by dint of such expenses. A like question came up before this court in the assessee's own case in Addl. CIT v. Rajasthan Spg. & Wvg. Mills Ltd. [2005] 274 ITR 465 in D.B. Income-tax Appeal No. 15 of 1999 relating to the assessment year 1987-88 decided on October 15, 2003. The question arose about money spent by the assessee for construction of a building for setting up the Manikyalal Verm....
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.... finding of fact. The fact that by becoming member of such association or contributing to such fund, such other participant or contributor is also benefited does not mean that the assessee has not spent sum exclusively and wholly for his business. The concept of 'wholly and exclusively' is not that nobody else is to be benefited by making like expenses. A question is why the assessee makes such contribution. If his contribution is motivated by his own interest and there is nexus between the expense incurred and his business interest he has spent the money for his own business exclusively and wholly. The fact that recipient of such contribution, viz., the association or fund exist for benefit for other persons also is not relevant. It is ....
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....took more time to collect and drop the mill children. Hence to solve these problems of staff children at the request of school the bus was given to school by the company thereafter which the bus problem of workmen's children were solved. Since the bus has been surrendered to the school no benefit of enduring nature was derived by the company as the right of ownership was transferred to school and, therefore, it is not a capital expenditure and by incurring this expense the assessee acquired a right from the school for its workmen's children for first point of departure and never the last point of arrival at the mills gate thereby the millman's children got first preference in getting into bus, leaving and reaching home in time. This bene....