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TMI Blog1996 (2) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... ors for effecting the amalgamation of Nawrosjee Wadia Ginning & Pressing Company with it, was of revenue nature and should be allowed as a deduction in the computation of its total income ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the 'assessee-company' was entitled to a deduction for a sum of Rs. 2,25,000 in respect of the contribution made by it to the Maharashtra Housing Board towards the construction of tenements for its workers ?" The facts concerning the first question are the following : a company named Nawrosjee Wadia Ginning & Pressing Company was amalgamated with the assessee-company. In that connection an expenditure of Rs. 10,350 was incurred by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are of the opinion that the Tribunal was right in its conclusion. The decision in Bombay Steam Navigation Co. [1953] (P.) Ltd.'s case (supra) also pertains to amalgamation of two shipping companies. The assessee-company took over the assets of the other company and part of the price was treated as a loan secured by a promissory note and hypothecation of all movable properties of the assessee-company. The loan was to carry simple interest at 6 per cent. The question that arose in the said case was whether the interest paid upon the said loan was deductible as revenue expenditure. It was held by this Court that it was an expenditure deductible under section 10(2)(xv) of the Indian Income-tax Act, 1922. It was held that transaction of acqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, deductible as a revenue expenditure. In this view of the matter, it is not necessary for us to deal with the other decisions cited before us on this question. Now, coming to the second question the finding of the Tribunal is that the amount of Rs. 2,25,000 was contributed by the assessee to the Maharashtra Housing Board towards construction of tenements for the company's workers. It was contended by the assessee that the said expenditure was incurred wholly and exclusively on the welfare of the employees and, therefore, constitutes legitimate business expenditure. The ITO and the AAC rejected the plea. The Tribunal, however, upheld the assessee's contention holding that the expenditure in question brought into existence no capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowable as a revenue expenditure. This Court held that by having the new road constructed for the improvement of transport facilities, the appellant had acquired an enduring advantage for its business and, therefore, the expenditure incurred by the assessee was of a capital nature. Dr. Gaurishankar says the principle of the said decision is equally applicable herein inasmuch as provision for better housing to the assessee's workers was ultimately a benefit - and an enduring benefit - to the assessee. On the other hand, the learned counsel for the assessee brought to our notice a later decision of this Court in L.H. Sugar Factory & Oil Mills (P.) Ltd. v. CIT [1980] 125 ITR 293 where after discussing the facts and the principle of the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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