TaxTMI 
TaxTMI 
2018 (2) TMI 1734
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....losing stock by holding that land under litigation or encroachment may have high market value than cost in subsequent years and therefore its value cannot be taken at nil. 1.1 The Ld. CIT(A) has erred on facts and in law in not considering the addition already made in earlier years on this account in confirming the addition made during the year resulting into excessive addition to the extent of Rs. 72.19 lacs. 2. The assessee craves to amend, alter, or modify any of the ground of appeals. 3. Necessary cost be allowed to the assessee." 2. Ground No. 1 is regarding the addition made on account of valuation of closing stock of land which was taken by the assessee at nil. During the assessment proceedings the AO noted that auditor in its report has made observation regarding non inclusion of stock of land measuring 340.34 acres valuing Rs. 12, 58,75,000/- as on 31.03.2009 being under litigation and encroachment though the said land is treated saleable. The AO accordingly asked the assessee to explain as to why the amount of Rs. 12,58,75,000/- should not be added to the total income of the assessee. In response the assessee stated in its reply dated 10.10.2011 that these lands are n....
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....s when the land under encroachment / litigation is not under the possession of the assessee, by following the principle of prudence such land needs to be valued at Nil. He has relied upon the following decisions:- * CIT vs. Nation & Grindlays bank Ltd. 145 ITR 457 * Shri Ram Bearing Ltd. vs CIT 199 ITR 579 The ld. AR has further submitted that for the A.Y. 2007-08 on this very issue the Tribunal vide order dated 24.06.2011 has set aside the issue to AO with the directions that when the litigation and encroachment will affect the valuation of the stock such cannot be valued at cost price. Thus, he has contended that in principle the Tribunal has accepted that the land under encroachment/litigation cannot be valued at cost price. He has referred to the details of the year wise statement of land under encroachment/litigation from assessment year 2006-07 to 2012-13 and submitted that the total area of land under encroachment/litigation has reduced from 361.66 acres in AY 2008-09 to 340.34 acres in the year under consideration. The ld. AR has further submitted that the AO made addition only on the basis of the remarks in the audit report whereas the issue was also raised by the C&AG ....
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....hen the assessee acquired the land and filed the dispute before 31- 03-06 then why such reduction was not considered when the assessee was changing the method of accounting in the assessment year 2006-07. As per charging Section, tax is levied on the actual income of the previous year. It means that facts which existed during previous year are to be considered. When the assessee makes his purchases, he enters his stock at cost price on one side of the accounts. At the close of the year, he enters the value of any unsold stock at cost on the other side of the accounts thus canceling out the 12 entries relating to the same unsold stock in the accounts; and then that it is carried forward as the opening balance in the next year's account. This canceling out of the unsold stock from both the sides of the accounts leaves only the transactions on which there have been actual sales and gives a true and actual profit or loss on his year's dealings. The only exception is that unsold stock can be valued at the cost price or market value whichever is less. The notional loss, if any, can be claimed in the year when unsold stock has a lesser value as compared to the stock price. However, notion....
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....ribution of Rs. 10,00,000/- to state Renewal Fund as allowable expenditure. 4. The appellant craves its right to add, amend or alter any of the grounds on or before the hearing." 8. Ground No. 1 is regarding the addition made by the AO on account of maintenance expenses in respect of transferred industrial areas deleted by the ld. CIT(A). 9. We have heard ld. DR as well as ld. AR and considered the relevant material on record. During the course of assessment proceedings the AO noted that the auditor in its report has made comments that the expenditure relating to maintenance of transferred industrial area amounting to Rs. 3,21,27,000/- is treated as expenditure of RIICO without receiving income from such area. Accordingly the AO has disallowed these expenditure and added to the income of the assessee. On appeal the ld. CIT(A) has allowed the clam of the assessee by following the decision of this Tribunal in assessee's own case for the assessment year 2005-06 as well as its predecessor order for the assessment year 2008-09. 10. The assessee was incorporated with the main object of development of infrastructure facility for industries and providing long term finance facilities to....
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....-tax Vs. Textool Co. Ltd. 135 ITR 200 (Mad.) Commissioner of Income-tax Vs. Investa Industrial Corporation Ltd. 119 ITR 380 (Bom.): Bharucha (B.D.) Vs. Commissioner of Income-tax 65 ITR 403 (SC) 6. The Id. A/R submitted further that as per Accounting Standard 5 'Net Profit or Loss for the period, Prior Period Items and Change in accounting Policy' issued by Institute of Chartered Accountants of India, prior period expense are those which arise on account of error and omission in preparation of the financial statements of one or more prior periods. In the present case the claim made during the year is not on account of error or omission committed in earlier years. In earlier years the assessee has debited this amount to the State Govt, and part of it was recovered but the remaining amount was not found recoverable during the year and therefore the write-off made during the year is expenditure for the year and not a prior period expenditure. The Id. A/R also distinguished the cases relied upon by the Assessing Officer and pleaded that the claim of write off made by the assessee is allowable deduction for the year under consideration. 7. The Id. D/R on the other hand tried t....
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....ised an objection to RIICO for not depositing the receipts for which RIICO has separately moved a case to Government for regularization. Finally, CMD, RIICO requested for modification in the Government order dated 31.1.1991 and allow. RIICO to retain the receipts so that they are able to maintain these industrial areas in a satisfactory manner. ACS was in agreement with the proportion. However, it was decided that the matter should be moved on file for formal clearance at appropriate level. (R.K. Shrma) Executive Director RIICO Again vide letter dated 30.3.2005 to the Principal Secretary. Industries, Govt, of Rajasthan, Jaipur, it was conveyed as under: "Till end of March, 2004, a sum of Rs. 1776.36 lacs has been spent by the Corporation on maintenance of transferred areas, whereas Corporation has received grant-in-aid, of only Rs. 1005.74 lacs. The excess expenditure of Rs. 770.62 lacs has been taken to the credit of Profit and Loss Account by raising a debit to expenses recoverable from Transferred Areas Account. The Corporation has therefore, requested the Government for release of this amount yide letter no. IPI/F-1 (9)-19/Pt-IV/137 dated I 9.05.2004 and no.IPI/F-1 (9)-1....
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....lowance by the AO but allowed by the ld. CIT(A) 12. We have heard ld. DR as well as AR and considered the relevant material on record. At the outset we note that the identical issue has been considered by this Tribunal in assessee's own case for the assessment year 2005-06 as well as for the assessment year 2007-08 in ITA No. 1267/JP/2010 vide order dated 24.06.2011 as held in para 4.2 as under:- "4.2 The Tribunal while deciding the appeal in the case of the assessee for the assessment year 2004-05 has decided the issue in favour of the assessee. While holding so, the Tribunal has referred to the decision in the case of the assessee for the assessment years 1994-95 and 1995-96 in which the Tribunal has held that such expenditure is allowable. In the assessment year 2003-04, such prior period expenses was allowed by the Tribunal vide its order dated 21.08.2007 in ITA No. 324/JP/2006. Following the decision of the Tribunal for the assessment year 2003-04, the Tribunal allowed the prior period expenses for the assessment year 2004-05 vide its order dated 30th Sept. 2008. Thus, the issue of allowability of prior period expenses stands decided in favour of the assessee. Therefore, th....
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....ure of such undertakings, under scheme to be approved by the State Govt., and (iv) Any other assistance/ relief program for any category of workers to be decided by the State Govt. Thus the contribution made to the aforesaid fund is solely for the purpose of the welfare and benefit of the employees. This issue has been decided by us in case of Rajasthan State Seeds Corporation Ltd., supra where we have held as under:- ''We have considered the rival submissions and perused the material available on record. We find that as per the memorandum of State Renewal Fund set up by the State Govt. , it is created with the object of providing a safety net for the workers likely to be affected by restructuring in the State Public Enterprises. We are thus of the view that contribution made to the said fund is solely for the purpose of welfare and benefit of the 5 employees. The Rajasthan High Court in case of CIT Vs. Rajasthan Spinning and Weaving Mills Ltd., 274 ITR 465 has been observed that if is for the assessee to decide whether any expenditure should be incurred in course of business. The expenditure can be incurred voluntarily and without necessity. Any contribution made by the assessee....
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....s 80IA of the Act. As regards the miscellaneous income the ld. CIT(A) has not allowed the claim of the assessee. Therefore, both assessee as well as Revenue are aggrieved by the order of the ld. CIT(A) on this issue. 17. Before us, ld. DR has submitted that the interest, penal interest and other incomes received by the assessee cannot be considered as income derived from the industrial undertaking eligible for deduction u/s 80IA of the Act. Since, these incomes are not earned from the main activity of the assessee therefore, the same cannot be considered as income directly related to the activity of developing, operating the industrial parks/SEEZ units . He has relied upon the decision of Hon'ble Supreme Court in case of Liberty India Ltd. vs. CIT (Supra) 18. On the other hand, ld. AR of the assessee has submitted that the assessee allots industrial land either on down payment basis or installment basis. When the industrialists are allotted on installment basis the price charged is inclusive of interest component therefore, in the books of accounts the installment received amount is recorded in two parts one towards the value of land (development charges) and another towards inte....
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....laneous income comprising site plan charge, lease agreement form, road cutting charges and other charges recovered from contract are also directly linked with the activity of industrial park and therefore, the same are to be included in the income of the assessee for deduction u/s 80IA of the Act. He has relied upon the decision of Mumbai Benches of the Tribunal in case of ITO vs. Hiranandani Builders 128 DTR 97. Thus, the ld. AR has pleased that the assessee is eligible for deduction u/s 80IA in respect of all the incomes which are directly linked with the activity of the industrial park. 19. We have considered the rival submissions as well as relevant material on record. As regards the claim of deduction u/s 80IA of the Act in respect of the interest and penal interest income is concerned we note that this income is not derived from the deposit of surplus fund with the bank but the interest and penal interest is received by the assessee on account of late payment by the allottee/debtor. Therefore, when the due amount from the debtor is business receipt then the interest on the said amount due to late payment would not take a different character from the principle receipt. Hence,....
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....xcluded from the profits of the industrial undertaking as the same cannot be stated to have been derived from the business of the industrial undertaking." We further note that the Hon'ble Supreme Court in case of CIT vs. Mehalaya Steel Ltd. (supra) has decided this issue in paras 17 to 29 are as under:- "17. An analysis of all the aforesaid decisions cited on behalf of the Revenue becomes necessary at this stage. In the first decision, that is in Cambay Electric Supply Industrial Co. Ltd.'s case (supra) this Court held that since an expression of wider import had been used, namely "attributable to" instead of "derived from", the legislature intended to cover receipts from sources other than the actual conduct of the business of generation and distribution of electricity. In short, a step removed from the business of the industrial undertaking would also be subsumed within the meaning of the expression "attributable to". Since we are directly concerned with the expression "derived from", this judgment is relevant only insofar as it makes a distinction between the expression "derived from", as being something directly from, as opposed to "attributable to", which can be said to ....
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....it is clear that profits and gains are derived from the business of the assessee, namely profits arrived at after deducting manufacturing cost and selling costs reimbursed to the assessee by the Government concerned. 19. Similarly, the judgment in Pandian Chemicals Ltd.'s case (supra) is also distinguishable, as interest on a deposit made for supply of electricity is not an element of cost at all, and this being so, is therefore a step removed from the business of the industrial undertaking. The derivation of profits on such a deposit made with the Electricity Board could not therefore be said to flow directly from the industrial undertaking itself, unlike the facts of the present case, in which, as has been held above, all the subsidies aforementioned went towards reimbursement of actual costs of manufacture and sale of the products of the business of the assessee. 20. Liberty India's case (supra) being the fourth judgment in this line also does not help Revenue. What this Court was concerned with was an export incentive, which is very far removed from reimbursement of an element of cost. A DEPB drawback scheme is not related to the business of an industrial undertaking ....
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....and followed the impugned judgment of the Gauhati High Court in the present case. In a pithy discussion of the law on the subject, the Calcutta High Court held: 'Mr. Bandhyopadhyay, learned Advocate appearing for the appellant, submitted that the impugned judgment is contrary to a judgment of this Court in the case of CIT v. Andaman Timber Industries Ltd. reported in [2000] 242 ITR 204/109 Taxman 135 wherein this Court held that transport subsidy is not an immediate source and does not have direct nexus with the activity of an industrial undertaking. Therefore, the amount representing such subsidy cannot be treated as profit derived from the industrial undertaking. Mr. Bandhypadhyay submitted that it is not a profit derived from the undertaking. The benefit under section 80IC could not therefore have been granted. He also relied on a judgment of the Supreme Court in the case of Liberty India v. Commissioner of Income Tax, reported in (2009) 317 ITR 218 (SC) wherein it was held that subsidy by way of customs duty draw back could not be treated as a profit derived from the industrial undertaking. We have not been impressed by the submissions advanced by Mr. Bandhyopadhyay. Th....
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....parts, by giving them a level playing field so that they could compete with their counterparts in central (non-remote) areas. The huge transportation cost for getting the raw materials to the industrial unit and finished goods to the existing market outside the state, was making it unviable for industries in remote parts of the country to compete with industries in central areas. Therefore, industrial units in remote areas were extended the benefit of subsidized transportation. For industrial units in Assam and other north-eastern States, the benefit was given in the form of a subsidy in respect of a percentage of the cost of transportation between a point in central area (Siliguri in West Bengal) and the actual location of the industrial unit in the remote area, so that the industry could become competitive and economically viable." (Paras 14 and 15) 25. The decision in Sahney Steel and Press Works Ltd.'s case (supra) dealt with subsidy received from the State Government in the form of refund of sales tax paid on raw materials, machinery, and finished goods; subsidy on power consumed by the industry; and exemption from water rate. It was held that such subsidies were treated....
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.... 80-IC. The Himachal Pradesh High Court, having wrongly interpreted the judgments in Sterling Foods (supra) and Liberty India's cases (supra) to arrive at the opposite conclusion, is held to be wrongly decided for the reasons given by us hereinabove." Thus, in view of the facts and circumstances of the case as well as following the decisions of Hon'ble Gujarat High Court in case of CIT vs. Suzlon Engery Ltd. (supra) and decision of Hon'ble Supreme Court in case of CIT vs. Mehalaya Steel Ltd. (supra) we hold that the interest and penal interest received from debtor due to late payment is part of profit of industrial undertaking eligible for deduction u/s 80IA of the Act. 20. So far as other miscellaneous income is concerned we note that this income comprise of site plan charge, lease agreement form charges, road cutting charges and penal interest received from contractor etc. It is pertinent to note that these receipts on account of above said services or violation of the condition of the contract by the vendors/ allottees cannot be separated from the business activity of developing, maintaining and operating industrial parks/SEZ units. These services and activities are part o....
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....round No. 1 when this issue on merit has been decided in favour of the assessee, therefore, ground no. 1 of the cross objection becomes academic in nature. Accordingly, we do not propose to go into ground no. 1 of the cross objection. 24. For the assessment year 2010-11 the assessee as well as Revenue have raised the following grounds:- Assessee's Grounds "1. The Ld. CIT(A) has erred in facts and in law in confirming addition of Rs. 71,03,87,000/- made by the AO to the value of closing stock by holding that land under litigation or encroachment may have high market value than cost in subsequent years and therefore its value cannot be taken at nil. 2. The assessee craves to amend, add, alter, or modity any of the ground of appeals. 3. Necessary cost be allowed to the assessee." Revenue's Grounds 1. Whether on the facts and in circumstances of the case and in law the Ld. CIT (Appeals) has erred in holding prior period expenses of Rs. 3,19,357/- as allowable expenses. 2. Whether on the facts and in circumstances of the case and law the Ld. CIT(Appeals) has erred in holding contribution of Rs. 20,00,000/- to state Renewal Fund as allowable expenditure. 3. Whether on the facts a....
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.... the disallowance made by the AO was deleted by the ld. CIT(A). 29. Before us, ld. DR has submitted that the contribution made to Centre for Development of Stone has not directed nexus with the business of the activity and therefore, the same cannot be allowable business expenditure. He has relied upon the order of the Assessing Officer. 30. On the other hand ld. AR of the assessee has reiterated the contention has raised before the authorities below and submitted that the assessee along with the State of Rajasthan has promoted a society of CDOS which carries various trade promotional events and provide vocational training to entrepreneurs, testing facilities of Indian Stones for standardization of quality, properties and suitability and also brings out through publication, important data and information for the benefit of stone industries of India as a whole and of Rajasthan in particular. All these activities carried by CDOS to develop the stone industries in the State of Rajasthan as a result of which various entrepreneurs are attracted to establish such stone industries and in turn stimulate the industrial growth in the state which is the main object of the assessee. Therefo....
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.... two different assessee. 10. Counsel for the respondent contended that on first issue regarding Section 37, the expenses which are made are jof capital nature, therefore, it cannot be taken as revenue expenditures. In that view of the matter, the first issue may not be considered. However, regarding second issue, he contended that assessee is not entitled for depreciation since he has not made any capital investment and this is raw material. 10.1 Regarding issue no. 3, he contended that there is concurrent finding of authorities and the issue is required to be answered in favour of the Department. 14. Regarding issue no. 3, taking into consideration the expenses which are done in view of decision in SA Builder's case (supra) and other judgments relied on the assessee, the issue is answered in favour of the assessee." Following the decision of Hon'ble jurisdiction High Court in case of Rajasthan State Mines & Minerals Ltd. ACIT and having regard to the facts that the contribution is made for development and promotion of industries in the State of Rajasthan through Centre for Development of Stones which is promoted by the assessee along with the State Government of Rajasthan we a....
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....sthan Spinning & weaving Mills Ltd 274 ITR 463. 35. On the other hand, ld. DR has relied upon the orders of the authorities below and submitted that the contribution for construction of Rajasthan House in Mumbai is otherwise expenditure in capital field and therefore, the same is not allowable as Revenue expenditure. Further this expenditure has no direct nexus with the business activity of the assessee and hence, it cannot be held as an expenditure incurred wholly and exclusively for business of the assessee. 36. We have considered the rival submissions as well as relevant material on record. At the outset we note that this Tribunal in assessee's own case for the assessment year 2003-04 while considering an issue of the expenditure incurred towards the contribution made to the construction of guest house in Delhi vide order dated 21.08.2007 in ITA No. 324/JP2006 has held in para 12 as under:- "12. Considering the above submissions, we are of the view that undisputedly assessee was not the owner of the four rooms in the guest house of the State Government at Chanakyapuri in New Delhi and the assessee was only entitled to use those four rooms allotted to it for staying of its off....
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....ers of the assessee. The Coordinate Bench of this Tribunal in case of Rajasthan Renewal Energy Corporation Ltd. vs. DCIT vide order dated 18.08.2017 in ITA No. 159& 202/JP/2015 and others while considering an identical issue has held in para 55 as under:- "55. We have heard the rival contentions and pursued the material available on record. It is not disputed that the contribution towards construction of Rajasthan Bhawan has been made as directed and authorized by the State Government, being the owner and shareholder of the assessee company. The question is therefore not about the authorization before incurrence of the said expenditure. The question is whether the said expenditure has been incurred by the assessee company for the purposes of its business or not. The onus is on the assessee company to establish the said fact. The ld AR has submitted that the assessee company has written to the Government of Rajasthan to provide accommodation facilities in the Rajasthan Bhawan to its officers on their visit to Mumbai, however, there is nothing on record to support the said contention. We are accordingly setting aside the matter to the file of the AO to examine the said contention an....
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....urplus is around Rs. 900/- Crores whereas the investment in stock and shares and equity is only Rs. 66.43 Crores. Even the net profit for the year is Rs. 204.84 Crores which is far more exceeds the value of stock of shares & securities held by the assessee. Thus, it was contended that the assessee's own funds comprising share capital, reserve and surplus is 13.49 times of the investment and hence no disallowance on account of interest expenditure u/s 14A is called for. The ld. CIT(A) deleted the disallowance made by the AO on account of interest expenditure u/s 14A of the Act however, the disallowance on account of administrative expenditure under Rule 8D(2)(iii) of Rs. 32,23,193/- was confirmed by ld. CIT(A). 39. Before us, ld. AR of the assessee has submitted that when the assessee is holding the shares and securities as stock-in-trade then no disallowance is called for u/s 14A of the Act. The assessee did not received any dividend on the shares which are held as stock in trade and not investment. The Department has accepted the profit of sale of shares/ securities as profit and gain from business in all the years including the year under consideration. Therefore, when the profi....
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.... assessee in the course of its business merely because the assessee is also having dividend income when there was no material brought to show that the assessee had incurred expenditure for earning dividend income which is exempted from taxation? 3. The learned Counsel for the assessee assailing the impugned order of the authorities contended that the assessee has incurred expenditure for purchasing shares. 63% of the shares so purchased are sold and the income derived therefrom is offered to tax as business income. The remaining 37% of the shares remained unsold. Those shares yielded dividend. The assessee has not incurred any expenditure to earn the said dividend income. Therefore, no expenditure could be attributed to the said dividend income and the said expenditure cannot be disallowed and the assessee is entitled to the benefit of deduction of the entire expenditure incurred in respect of purchase of shares. The authorities have not properly appreciated Section 14A of the Income Tax Act and committed a serious error in passing the impugned order. 4. Per contra, the learned Counsel for the revenue pointed out that admittedly when shares retained by the assessee has yielded di....
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.... dividend or interest is earned from securities held by the assessee as its stock-in-trade. The assessee had raised other issues as well. The Tribunal having decided the above question in favour of the assessee did not decide the other issues. 3. As we have also decided the question in favour of the assessee, it follows that section 14A is inapplicable altogether. The appeal must, therefore, be dismissed. Had we decided the issue against the assessee, we would have remanded the matter to the Tribunal for its decision on the other aspects, such as, whether the investments and securities yielding exempt income were from interest free funds/assessee's own funds or from interest bearing funds as the Tribunal had not decided the same. 4. The respondent filed a return declaring an income of about Rs. 670 crores which was selected for scrutiny. The return showed dividend income exempt under section 10(34) and (35) of about Rs. 11.07 crores and net interest income exempt under section 10(15)(iv)(h) of about Rs. 1.12 crores. The total exempt income claimed in the return was, therefore, Rs. 12,19,78,015/-. The assessee while claiming the exemption contended that the investment in share....
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....ding traning for developing entrepreneurial skills in pursuance of its object of industrial development debited under the head Corporate social responsibility expenses, by holding that it is an application of income and not incurred wholly and exclusively for the purpose of business. 2. The Ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming the disallowance of claim of deduction u/s 80IA in respect of other income on the ground that the same is not derived from an eligible business. 3. The Ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming addition of Rs. 1,85,60,000/- made by the AO to the value of closing stock by following the decision of his predecessor where it was held that land under litigation or encroachment may have high market value than cost in subsequent years and therefore its value cannot be taken at nil. 4. The Ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming the disallowance of Rs. 17,56,304/- u/s 14A by application of Rule 8D(2)(iii) of the IT Rules. He has further erred in applying Rule 8D(2)(iii) by holding that the word 'investment' used in the Rule would ....
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....appeal is regarding the claim of 53,48,000/- under the head Corporate Social Responsibility expenses (CSR). The assessee contended that expenditure is incurred on training at ATDC (Apparel Training & Development Centre) Smart Centre for integrated Skill Development Scheme in respect of textile Industries as well as garment sector so as to generate employment, availability of skilled manpower, generation of new investment etc. It was further contended that it would help in industrial growth of the State and establishment of new industries in the area developed by the assessee. The AO did not accept this claim of the assessee and held that CSR expenses incurred by the assessee is neither covered under the provisions of section 37(1) of the Income Tax Act nor it can be held as diversion of income by overriding title. Thus, the AO was of the view that the expenditure is not incurred with a view to bring any profits or monetary advantage to the assessee. Accordingly, the Assessing Officer has disallowed the claim of Rs. 53,48,000/- on this account. The ld. CIT(A) has confirmed the disallowance made by the AO and held that it is appropriation of profit and not expenditure incurred wholly....
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....04.2015. Thus, when specific provision has been brought into statute for allowing such expenditure w.e.f. 01.04.2015 then prior to the said provisions the deduction in respect of the expenditure incurred under Corporate Social Responsibility is not allowable unless and until the expenditure is incurred wholly and exclusively for the purpose of business of the assessee. The training to the employment seeker may be good gesture on the part of the assessee but in the absence of even a proxy link between the expenditure and business activity of the assessee the said expenditure cannot be allowed u/s 37(1) of the Act prior to 01.04.2015. Raipur Bench of the Tribunal in case of ACIT vs. Jindal Power Ltd. 138DTR 313 has held that the expenditure towards Corporate Social Responsibility referred to section 135 of Companies Act is not allowable in view of the fact that the explanation 2 to section 37 has been inserted w.e.f. 01.04.2015. Though ld. AR of the assessee has relied upon the various decisions including the decision of Hon'ble jurisdiction High Court however, we find that in those cases the expenditure was incurred by the assesse in connection with the business activity, therefore,....
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....urred the said amount for increasing the procurement of milk and protecting the dairy farmers from the threat of the private milk vendors, launched various schemes from time to time for inducing more and more milk producers to join milk development cooperative societies in furtherance of its fundamental objectives, which, in our opinion, is certainly in the nature of business expenses. It is also a finding of fact that one of the objectives of the respondent-assessee is to carry out such activities as may be conducive for the promotion of the dairy industry and improvement and protection of milch animals and in pursuance of the said objective, it has to run technical, administrative, financial and other necessary support to the societies. The respondent-assessee collects milk from its member unions i.e. primary dairy cooperative society (DCS) and sells the milk and milk products to the consumers under its brand name "SARAS". For increasing the procurement of milk and protecting the dairy farmers, it has to launch various schemes for inducing more and more milk producers to join the primary dairy cooperative society and for this purpose, it has incurred expenditure and thus, in our ....