TaxTMI 
TaxTMI 
TaxTMI 
2004 (2) TMI 9
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.... garden building, furniture and other accessories as deductible expenditure under section 37 read with sections 28 and 32 of the Income-tax Act, 1961?" The relevant assessment year is 1971-72. The assessee has declared income of Rs. 25,05,550. During the course of assessment, the Assessing Officer has noticed that the assessee has claimed expenses on account of garden maintenance at Delhi, Jaipur and Sawaimadhopur. After considering the submissions, the Assessing Officer was of the view that the expenses are not wholly and exclusively for the purpose of business so far as the garden maintenance at Sawaimadhopur and Jaipur is concerned and the expenses incurred on garden maintenance at Delhi, that has nothing to do with the business of the ....
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.... office. It was given in writing that the assessee has a liaison office at Jaipur. The employees of other offices visit Jaipur very often. The lawns maintained are around the office building and has garden of rose and other flowers. Office lawns are used by Rajasthan Chamber of Commerce and Industry for holding seminars and parties, etc. On this ground the amount is claimed to be allowable. I have gathered that the assessee's building at Jaipur has office of its own and also of: (1) R.K. Hotels (2) Jai Agro Industries Ltd. (3) Mukul Trading Co. (P.) Ltd. for some time. (4) Sahu Minerals and Properties Ltd. (5) Alok Udyog Services Ltd. The record regarding the receipt of seeds, plants, etc., and their dispatches are not known because ....
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....ening' though they are expenses debitable to other heads. Out of this an amount of Rs. 53,911 is debitable to the Delhi gardens and the balance to Sawaimadhopur. The assessee says that these expenses are on account of building repairs, travelling, conveyance, etc. and, therefore, it should not be treated as part of the gardening expenses and allowed fully. (iii) The submission put forth before me that the maintenance of garden is primarily for the welfare of the employees is not correct. The total number of employees is about 100 at Delhi and the garden maintained is about ten miles from the office of the company. Delhi has a number of public gardens and it looks little off the way to assume that the employees of the company would make it ....
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....16, dated March 31, 1971 being cost of canvas court tent Rs. 6,115). (iv) The above facts only show that Delhi gardens are not at all required from employees' welfare angle. It is maintained for considerations other than business. It is a public garden. I, therefore, disallow the whole sum claimed at Rs. 2,83,965. Regarding the claim that Rs. 53,911 have been debited to the gardening expenses though pertaining to other head is also rejected because these expenses are all for the purposes of gardening which is not for business considerations. Depreciation on the garden building is also not allowed." In appeal before the Appellate Assistant Commissioner, the Appellate Assistant Commissioner has considered this aspect and, in para. 69 of hi....
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....ssioner found that the expenses incurred on the maintenance of the garden at Sawaimadhopur and Jaipur, are not wholly for the purpose of business. Considering the discussions of the Assessing Officer, we see no justification to allow the entire expenses on the maintenance of gardens at Jaipur and Sawaimadhopur when the expenses are not incurred wholly for the purpose of business. Even the Tribunal has accepted that the expenses may not have a direct role to play in the manufacturing activity but have some impact on the image of the company. That is all irrelevant. The maintenance of any garden has hardly anything to do with the business or profit from business. When the gardens are not maintained for the purpose of business, then there is ....