TaxTMI 
TaxTMI 
2009 (3) TMI 48
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....any for weighted deduction under section 35C on :- (a) expenses on research on mentha arvensis at the assessee-company's mentha research centre ; (b) expenses on distillation services provided to the cultivators ; & (c) expenses on scientific farming. Additional question for the assessment year 1972-73 only :- "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the claim of deduction of sur-tax payable under the Companies (Profits) Sur-tax Act, 1964, in working out the business income was not admissible" ? 2. The relevant facts of the case are as under :- (a) The assessee is a limited company which manufactures vicks from mentha oil. Mentha oil is extracted f....
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....jected to the allocation of expenditure on salaries, entertainment, stationery, office expenses, postal and telephone expenses, motor-cycles and jeeps. He granted a deduction in respect of expenditure of Rs.1,03,094/- on demonstration of modern techniques or methods of agriculture under Section 35C(b)(ii). He held that research expenses were not entitled to a weighted deduction and similarly the assessee was also not entitled to a weighted deduction under section 35-C on distillation services amounting to Rs.2,45,324/-or on expenditure of Rs.1,25,330/- incurred on scientific farming. (c) For the assessment year 1972-73 the assessee company made a similar claim of weighted deduction under Section 35-C on research and farming expenses to t....
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....ncome-tax officer in tinkering with the allocation and bifurcation of expenses as made by the assessee between research and demonstration. They accordingly accepted the assessee's claim of demonstration expenses of Rs.2,16,449/-. ITAT rejected the deduction in respect of research expenses claimed by the assessee for an amount of Rs.1,96,480/-, the expenditure on distillation services amounting to Rs.2,45,324/- as also scientific farm expenses amounting to Rs.1,25,330/-. (g) That thereafter on an application made by the assessee for a reference the above mentioned questions of law were referred to this Court. (h) Before answering the questions, it would be useful to reproduce section 35-C as it existed during the relevant assessm....
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....lities as may be prescribed. Explanation - In computing the expenditure with reference to which deduction under this section is to be allowed, the amount, if any, received by the company or co-operative society in consideration of, or as compensation for, such goods, services or facilities shall be deducted. (2) Where a deduction under this section is claimed and allowed for any assessment year in respect of any expenditure of the nature specified in sub-section (a), deduction shall not be allowed in respect of such expenditure under any other provision of this Act for the same or any other assessment year." 3. Counsel appearing for the applicant first placed reliance on the judgment of the Apex Court in CIT Vs.Cynamid India Ltd., ....
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....port, artificial insemination and fodder growing to the persons who supplied raw milk to the assessee. The Gujrat High Court held that under Section 35-C, dissemination of information or demonstration of modern techniques or methods of agriculture, animal husbandry, dairy or poultry farming need not be of such a nature that they should benefit the recipient to adopt such method or technique on his own. It further held that the assessee undertook activities of artificial insemination, cross breeding, etc. which would result ultimately in improving the breed of the milch cattle and as a consequence improve yield both in quantity and quality resulting in better supply of raw material to the assessee. That such activities of the assessee ....
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....the meaning of these terms as contained in Section 35-C(b)(ii), by giving a wider meaning to these terms. It was however, conceded that the distillation plant was not being used directly by cultivators and it was being operated by expert operators engaged by the assessee. We find that the distillation process was carried on firstly for determining the quantum of mentha oil in the crops grown by cultivators to further enable the assessee to pay the cultivator his dues in accordance with the quantum as ascertained. However, main purpose of the distillation was commercial in nature and was to extract the mentha oil for use as raw material in manufacturing the final product "Vicks". The use of the distillation plant was therefore, not by ....