1987 (8) TMI 49

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.... Y. V. ANJANEYULU J.-This reference under section 256 of the Income-tax Act, 1961, relates to the income-tax assessment year 1974-75. The question referred for consideration is : " Whether, on the facts and in the circumstances of the case, the amount of Rs. 77,087, being the expenditure incurred by the appellant company for giving silver medals to the shareholders and silver wall plaques to th....

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....87 was disallowed on the ground that it was not incurred in connection with the business. The consideration that was brought to bear upon the matter is that the silver mementoes presented to the shareholders and directors do not indicate connection between the business carried on by the assessee and the presentation of the mementoes. Learned counsel for the assessee, Sri Parvatha Rao, submits t....

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....0 years, the shareholders, by their conduct, contributed to the prosperity of the company in its business and there is nothing uncommon in the assessee-company endeavouring to recognise the part played by the shareholders in the prosperity of the company by giving them small mementoes. We do not consider that the causal connection between the business carried on by the assessee and the shareholder....