TMI Blog1995 (12) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... was allowable as deduction in terms of sub-section (1) of section 37 of the Income-tax Act, 1961 ? " Briefly stated, the facts of the case are that the applicant is a public limited company registered under the Companies Act, 1956, and carries on the business of manufacturing graphite electrodes, graphite anodes and other allied products. In the course of its assessment for the assessment year 1979-80, the applicant claimed deduction of Rs. 22,643 being expenditure on plantations as business expenses. The Income-tax Officer disallowed the claim on the ground that the expenditure was in the nature of capital expenditure. The appeal proved to be vainful and further appeal before the Tribunal did not fluctuate the fortune. Copies of the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion as non-meritorious and contended that the question deserves to be answered in favour of the Revenue. We find that the Tribunal observed in the order (Annexure " C ") as under : " If the plantation had been of seasonal flowers or of temporary plants like roses, we would have had no hesitation in holding the expenditure to be of a revenue nature. " In Zenith Steel Pipes Ltd. (No. 1) v. CIT [1990] 185 ITR 126 (Bom), it was held that the expenditure incurred on the wire fencing was allowable as revenue expenditure. In Teksons Pvt. Ltd. v. CIT (No. 2) [1979] 120 ITR 745 (Bom), it was held that the expenditure incurred by the assessee for preparation of the playground was incidental to the activities of the assessee and was a revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting trees and maintaining a garden in the factory premises and labour quarters in order to avoid pollution of environment and create congenial atmosphere, is allowable as business expenditure. Indisputably the aforesaid expenditure did not result in any gain to the applicant-assessee and did not enhance the value of the establishment. The expenditure was intended to make the atmosphere pollution-free. The Tribunal did not record any categorical finding that the expenditure was to result in any appreciation of the assets or was unrelated to the business activities of the applicant-assessee. It is now popularly voiced that plantation in such factory is necessary to avoid pollution of environment and create a congenial atmosphere. The Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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