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2009 (12) TMI 410 - KARNATAKA HIGH COURTBusiness Expenditure- The assessee is a State-owned corporation enjoying the status of a company. The Assessing Officer disallowed the claim of Rs. 15 lakhs spent by the assessee under the head “Miscellaneous expenses” which was incurred by the assessee at the instance of the State to promote its business at a village known as “model village” in Mysore district under the aegis of Mysore Zilla Panchayath, Swasthi Gram Yojana. The claim was disallowed by the Assessing Officer only on the ground that the amount spent by the assessee in a sum of Rs.15 lakhs is not for its business purpose. Therefore, the same was disallowed. Tribunal allowed it. Held that- if the assessee could spread it activities to rural part of the state, it could cater to the needs of the people and would satisfy the purpose for which it was created by the state. The expenditure was deductible.
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