TMI Blog1989 (10) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... of the provident fund contribution to the agricultural staff, gratuity paid to the agricultural staff, and 1/3rd gratuity paid to the head office staff without apportioning the same between the expenditure as attributable to the agricultural activities and those attributable to business activities, in computing the total income of the assessee-company for the assessment years 1962-63 to 1966-67? 2. The assessee-company owns a sugar mill. It also owns sugar farms and grows sugarcane. Its business is that of manufacture of sugar involving activities which are partly agricultural and partly non-agricultural. The proceedings relate to assessment years 1962-63 to 1966-67 (both inclusive). The assessee, inter alia, claimed deduction in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee- company was carrying on agricultural activity as well as running an industry in so far as it was manufacturing sugar from the sugarcane. The cost of sugarcane in the hands of the assessee was taken to be the cost of growing sugarcane as well as all other expenses incurred in connection therewith. Income arising from such an activity was treated as agricultural income and was liable to agricultural income-tax. A part of that expenditure could not also be allowed as deduction while computing the assessee-company's business income. As regards the decisions relied upon by the Tribunal, Shri Jetley stated that the expenses involved in those cases were expenses which were paid to the staff mainly engaged in the industry and/or was inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iable to pay bonus to its agricultural staff. The Tribunal has, on that basis, given a finding in paragraph 4 of its order to the effect, viz., that the assessee-company constitutes an industry, for that reason the workers were entitled to bonus, and as such the claim of the assessee to deduct amounts paid as bonus even to the agricultural staff and workmen was an allowable expenditure. Accordingly, we are in agreement with the Tribunal that but for the fact that the assessee was an industry, the assessee would not have been liable to pay bonus to the agricultural staff and workmen. The payment having been made in the capacity as owner of industry as distinct from owner of a agricultural farm, the same was, therefore, clearly allowable. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities of the assessee. The disallowances were deleted by the AAC himself. Against that part of the AAC's order the department had came up in appeal before the Tribunal which was dismissed. The department had not challenged the deletion of other overhead expenses in full by raising a question of law. Apart from the fact that in view of this Court's decision in Maharashtra Sugar Mills Ltd.'s case (supra) . There is no provision justifying disallowance of a part of the expenditure by apportioning it in the manner it was done, the very fact that the department had not challenged deletion of other overhead expenses made in similar circumstances shows that there is no merit whatsoever in this part of the question raised at the instanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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