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2005 (11) TMI 169 - ITAT AHMEDABAD-BDisallowance u/s 37 - Payment made to the Ministry of Forest and Environment - HELD THAT:- Relying on the decision of the Hon'ble Supreme Court in the case of Mahalakshmi Sugar Mills Co. v. CIT [1980 (4) TMI 1 - SUPREME COURT] held the same as compensatory in character, and thus, allowable as a business expenditure u/s 37. The assessee happens to be one such unit. Thus, we hold the impugned payment by assessee to the Government of Gujarat as compensatory in nature, and thus allowable in full. The order of the learned CIT(A) is thus upheld. Payment(s) made to Ahmedabad Municipal Corporation ("AMC")/Gujarat Industrial Development Corporation ("GIDC") and to M/s. Odhav Enviro Projects Limited (OEPL), towards setting-up of a common Effluent Treatment Plant (ETP) - Claimed as "Revenue or Capital" Expenditure - HELD THAT:- Once the matter becomes subjudice, it is the writ of the court that shall hold the field, so that even as the assessee's primary obligation to treat its discharge may have been the factor weighing on the court's mind, the very fact that it directed the defaulting unit(s) to contribute also towards the pipeline, only goes to show that it looked at the larger picture, and did not adjudicate in the matter on the basis of that primary obligation alone. And the considerations that would have weighed on the said units, in accepting the court's directions, could only be that of business. As such, the contribution even though comprising of two separate amounts for different purposes, has to be viewed as a composite sum, serving the same end, and forming part of the same common scheme formulated by the court, so that one cannot be divorced from, or looked at independent of, the other, as, for want of either, the said scheme becomes inoperational. We hold the entire contribution by the assessee for the setting up of the common ETP facility and for the laying of the pipeline network for conveyance of the discharge, in the facts and circumstances of the case, as a revenue expenditure. We order accordingly, upholding the order of the learned CIT(A). In the result, the appeal is partly allowed.
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