TaxTMI 
TaxTMI 
1988 (10) TMI 57
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.... for the purpose of business of the company. It is therefore submitted that the expenditure is admissible while computing the total income. It is submitted that it be so held now. Without prejudice to the above in any event, if it is held that the expenditure is in the nature of entertainment expenditure, appropriate deduction be allowed under s. 37(2A) of the IT Act. It is submitted that it be so held now." 2. At the outset the learned counsel for the assessee stated that he did not wish to press the alternative contention but would restrict his arguments to claiming the expenditure in question as being related to "staff welfare". 3. The ITO in the course of the assessment proceedings observed that the assessee had paid a sum of R....
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....Ltd. and Apara Textile Traders Ltd. Hence the payment of Rs. 1 lakh to Gujarat Cricket Association is claimed as staff welfare expenses by the assessee company is excessive and unreasonable having regards to the facilities for which the payment is made. So after verification of the facts, it is considered to be excessive and unreasonable. Therefore, the amount paid to Gujarat Cricket Association of Rs. 1 lakh is not to be allowed as deduction. As per assessee's note, assessee itself explained that the facility available for a period of 25 years, when the Cricket Matches are being played in the stadium. Therefore, after considering the facts that the contribution to the Gujarat Cricket Association of Rs. 1 lakh is not a revenue expenditur....
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....red out of commercial expediency. According to the learned counsel it had been incurred voluntarily and primarily with a view to give some benefit to the employees of the company. It was further submitted that the employees after watching a cricket match would be in a better state of mind to perform their job in a satisfactory and efficient manner. It was also the case that the entire payment merited deduction since the reasonableness had to be adjudged from the point of view of the businessman and not of the Revenue. In support of his arguments the learned counsel for the assessee relied on the decision of the Hon'ble Supreme Court in the case of CIT vs. Walchand and Co. Pvt. Ltd. (1967) 65 ITR 381 (SC). He also referred to the legal opini....
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....as presumed that some benefit had been gained then the same could only be one of enduring nature and available to the assessee in the subsequent years. According to him the decision of the Supreme Court relied upon by the assessee was distinguishable and not applicable to the facts of the present case. The learned Departmental Representative also pressed into service in support of his arguments the decision of the Supreme Court in the case of Indian Molasses and Co. (Pvt.) Ltd. vs. CIT (1959) 37 ITR 66 (SC). He finally made an impassioned plea for the confirmation of the order of the CIT(A). 9. We have examined the rival submissions and have also perused the orders of the ITO and the CIT(A). We have also considered the paper book furnish....
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....period of 25 years without any further payment. In so far as the assessee's claim for the payment to be treated as on account of "staff welfare" is concerned we are of the view that this argument is far fetched and not tenable on the facts and circumstances of the case. It is rather strange that a company which has not spent a single pie on "staff welfare" during the last so many years has suddenly woken up to part with a lac of rupees and that also for obtaining sitting accommodation in a cricket stadium which is still under construction. It is more likely that the 8 or 9 employees who are presently with the company may or may not be in the same employment for a period of 25 years hence to watch the cricket matches. Our understanding of th....