TMI Blog2003 (5) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... se issues are that the assessee-respondent is a co-operative society, registered under the Rajasthan Co-operative Society Act, 1965. As the name Churu Zila Sahakari Dugdh Utpadak Sangh Ltd., Sardarshahar, Distt. Churu, itself suggests, the main activity of the assessee-society is to collect milk of all member societies at a reasonable rate, to process the same in a scientific manner, distribution of the same, preparation of other allied milk products, development of a dairy plant, to promote several member societies to produce fodder, other agricultural produce for the cattle, to provide medical relief to the said cattle, get them insured, etc. All these main activities are mentioned in the bye-laws of the co-operative societies which are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n matters relating not only to milk but also on other aspects of the life as well. It is also the case of the assessee that the assessee has field staff and other technicians which are headed by the managing director. Major decisions are taken after approval and are sent to Board/District Collector. Once a project or programme is undertaken, it has to be concluded. The said project/programme may go on for a number of years. 4. It is revealed from the facts on record that the grant by the Government is lower whereas the expenditure is on the higher side. The grant is secondary and once the basic/major activities are undertaken by the assessee-society, then whether grant is received or not, the assessee has to continue its activities. After ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative societies in various matters. These activities are basically not the business of the assessee and is apparently completely sponsored by the RCDF. According to the AO, this amount is to be set off by the assessee out of reimbursement received from sponsoring agencies. 8. We have gone through bye-laws of the assessee-society which are placed at p. 16 of the paper book. The programme which is called TIP is a compulsory programme as per these bye-laws which the assessee-company has to definitely carry out and for that matter a grant is also given in aid to carry on such programme. It seems that the Department has not doubted the expenditure incurred but only has raised objection that these expenditure are not relatable to the business o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he only limitation is that it should be for the purpose of the business, that is to say, the expenditure incurred should be for the carrying on of business and the assessee should incur it in his capacity as a person carrying on the business. It cannot include sums spent for purposes unconnected with the business." 9. The Hon ble Supreme Court in the case of CIT vs. Delhi Safe Deposit Co. Ltd. (1982) 26 CTR (SC) 411 : (1982) 133 ITR 756 (SC) has held that true test of an expenditure laid out wholly and exclusively for the purpose of trade and business is that it is incurred by assessee as incidental to his trade for the purpose of getting the trade going and of making it pay and not in any other capacity than that of a trader. It has furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entirely irrelevant in determining the question whether the expenditure ought to be allowed as a deduction." 12. In this case if we apply the ratio of the above decisions to the facts of this case, we are of the considered opinion that the expenditure incurred towards TIP by assessee-society is definitely relatable to its business, for preservation of the business, for getting the business of the assessee-society going on, etc. As the name TTP suggests, the technical training is a must for the persons who are dealing in milching process from the cattle and the technical method by which the milk produced by such milching is preserved in a better and hygienic way and for longer period is definitely a business activity of the assessee which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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