TaxTMI 
TaxTMI 
2007 (2) TMI 194
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....in holding that the amount of Rs. 1.5 lakhs paid towards the construction of building of the Madras Chamber of Commerce is allowable as a business expenditure? (ii) Whether in the facts and circumstances of the case, the Tribunal was right in holding that the premium payable on redemption of debentures in future years is to be spread over and part of it allowed as a deduction in this year? 2. The assessee filed its return for the assessment year 1988-89 claiming deduction to the tune of a sum of Rs. 1.5 Lakhs being contribution to the Madras Chamber of Commerce as business expenditure, it being a member. The assessee contended that the maintenance of the Trade Chamber was for the furtherance of the business interest of the const....
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.... the interests of the various members, like the assessee. 5. The Revenue is on appeal before this Court, contending that the Chamber of Commerce renders assistance to all the members and not in any particular manner to any member, like this assessee, so as to consider the expenditure as directly connected with the assessee's business. The Revenue contended that even if it is considered that the Chamber's business are so interwoven with the assessee's activities, it could only be in the nature of a capital expenditure and hence, in any event, not an expenditure to be allowed as a business expenditure. 6. The question whether a particular expenditure is a revenue expenditure or a capital expenditure is a vexed question. The ....
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....hether it could be sustained on ordinary canons of commercial expediency simpliciter, whether it is a step in aid of future expansion or prolongation of life of an existing business, whether it is to secure an enduring benefit, whether the expenditure constitutes conceivable nucleus to form the foundation for the posterior profit earning, whether the expenditure could be viewed as an integral part of the conduct of the business and to avoid the in-roads and incursions into its concrete present and potential future, are all some of the main instances which have a bearing on the decision, whether in a given case, the expenditure is capital or chargeable to Revenue. On the whole, an objective application of the judicial mind to the facts of ea....
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....ed over a period of time to include within its fold the concrete expression of care and concern for the society at large and the people of the locality in which the business is located, in particular. Being known as a good corporate citizen brings goodwill of the local community, as also with the regulatory agencies and the society at large, thereby creating an atmosphere in which the business can succeed in a greater measure with the aid of such goodwill. 10. The facts in this case before us stand on a stronger footing, since the contribution made by the company is for the Chamber of Commerce whose activities are closely linked with the welfare of the Corporate entities who are members therein and whose interest are taken care of by the....