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TMI Blog1971 (2) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a deductible expense without assigning any reason. The assessee appealed. The Appellate Assistant Commissioner confirmed the disallowance observing that the assessee had failed to prove as to how these expenses were necessary for the purpose of running the business. On second appeal, the Income-tax Appellate Tribunal held that, although such expenses might not be tangibly connected with the carrying on of the business, it had certainly an intangible bearing on it since to a god-fearing man such expenses were expenses which create a sense of security and prosperity and add to the assessee's general capability to do better business. Accordingly, the assessee's claim to deduct the said items as admissible expenses was allowed. On an appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business' is wider in scope than the expression 'for the purpose of earning profits". Its range is wide; it may take in not only the day to day running of a business but also the rationalisation of its administration and modernisation of its machinery; it may include measures for the preservation of the business and for the protection of its assets and property from expropriation, coercive process or assertion of hostile title; it may also comprehend payment of statutory dues and taxes imposed as a precondition to commence or for the carrying on of a business; it may comprehend many other acts incidental to the carrying on of the business. However wide the meaning of the expression may be, its limits are implicit in it. The purpose shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the alleged payment is not real or that it is not incurred by the assessee in the character of a trader or that it is not laid out wholly and exclusively, for the purpose of the business of the assessee and to disallow it. But it is not the function of the Tribunal to determine the remuneration which in their view should be paid to an employee of the assessee." He also refers to Sree Meenakshi Mills Lid. v. Commissioner of Income-tax, wherein their Lordships of the Supreme Court, while holding that the expenditure incurred to resist in a civil proceeding the enforcement of a measure, legislative or executive, which imposes restrictions on the carrying on of a business, or to obtain a declaration that the measure is invalid, would, if oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belief which the assessee had in respect of the supernatural blessings, it should be held that these expenses were incurred for running the business. It is neither possible nor desirable to delve in the sphere of supernaturalism. For some it is superstition only, while for the others, it is an essential part of life since the destinies of men are controlled by these forces. May be there are forces in heaven of which men know not. Be that as it may, it is difficult to hold that the expenses in question were incurred for the carrying on of the business of the assessee and that he incurred the same as a businessman. Walchand's case does not help the assessee. What has been held in that case is that once an expenditure falls within the categor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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