TMI Blog2020 (11) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee they are entitled to claim it as reduction because it amount to commercial expediency as the assessee would get visibility by contributing towards the programme - HELD THAT:- Letter issued by the Government of Tamil Nadu has been held to be only intimation/invitation and that cannot be the sole reason for the appellant to claim the same as an expenditure under Section 37 - As relying on MALAYALAM PLANTATIONS LIMITED [ 1964 (4) TMI 9 - SUPREME COURT] Revenue may realise the amounts from the business assets is a consequence of the default of the assessee in not discharging his statutory obligation, but it does not make the expenditure any the more expenditure incurred in the conduct of the business. It is manifest that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... munity welfare? 2.Whether the expenses incurred by the assessee with an intention of securing the support of the public near the area of operation of the undertaking to avoid potential losses due to any interruption to the organization and to promote awareness and goodwill among the public is out of commercial expediency and hence an allowable deduction. 3.Whether the order of the Tribunal in not allowing the social and community welfare expenses incurred for winning the goodwill of the people of the locality u/s.37(1) of the Act is perverse? and 4.Whether the Tribunal was right in law in remitting the issue to the assessing officer to adjudicate the issue of allowability of the expenditure applying the test of the commercial exped ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emit this issue to the file of AO for fresh adjudication on the similar directions. 5.On perusal of the above, we find that thee Tribunal on appreciation of the factual position rightly came to the above conclusion. Therefore, we find that no substantial questions of law arises for consideration with regard to the community welfare expenses. 6.The next we move on to consider the other set of substantial questions of law which relate to expenses incurred by the assessee by contributing to Chennai Open Tennis Tournament. According to the assessee they are entitled to claim it as reduction because it amount to commercial expediency as the assessee would get visibility by contributing towards the programme. The assessee also referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (supra) is not applicable to the facts of the present case. The facts of the case are that the assessee, a Govt. of Tamil Nadu undertaking made a contribution to Flag Day Fund and Chief Minister Rehabilitation Funds both under the direction of the Government and the assessee being a Government undertaking is obliged to obey the direction of the Government, whereas in the present case there is no mandatory direction from the Government to make a contribution towards the tennis tournament nor the assessee is a State Government undertaking. In the present case, there is nothing to show that the assessee established the nexus between the contribution to the tennis tournament and the benefit which the assessee's business received by v ..... 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 rationalization of its administration and modernization of its machinery; it may include measure for the preservation of the business and for the protection of its assets and property from expropriation, coercive process or assertion of hostile titles; it may also comprehend payment of statutory dues and taxes imposed as a precondition to commence or for carrying on of a business; it may comprehend many other acts incidental to the carrying on of a business. However wide the meaning of the expression may be, its limits are implicit in it. The purpose shall be for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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