1974 (9) TMI 43

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....of tea-growing. The assessment year is 1964-65, for which the relevant accounting year is the calendar year 1963. The Income- tax Officer found under the head "repairs account" an expenditure of Rs. 26,643. The said expenditure included the cost of fencing to the tune of Rs. 19,748. He, however, found that in the immediately preceding assessment year the assessee had claimed an expenditure in resp....

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....ention. He upheld the disallowance made by the Income-tax Officer. The assessee preferred an appeal before the Tribunal. The Tribunal heard the appeal along with two appeals for the assessment years 1962-63 and 1963-64. It was contended on behalf of the assessee that the new pillars purchased by the assessee were made of timber and did not have a long life. It was also urged that the fencing of th....

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....rther submitted on behalf of the assessee that unless the said expenditure was incurred, expenses on account of watch and ward staff would have been incurred. The Tribunal reached the conclusion that the disallowance of Rs. 12,000 was not justified and, therefore, directed its deletion. In the premises, under section 256(1),of the Income-tax Act, 1961, the following question has been referred to t....

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.... that the expenditure had a direct nexus with, the day to day business of the assessee. The assessee's business was to carry on the business of tea growing and the tea leaves of the garden could not be protected and the business could not be carried on unless there were proper fencing. Therefore, incurring of the expenditure, was in connection with the carrying on of the business by the assessee. ....