TMI Blog1986 (3) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred pooja expenses from time to time. For the assessment years 1976-77 to 1980-81 relevant to the corresponding previous years, the assessee filed its returns under the Karnataka Agricultural Income-tax Act, 1957 (Karnataka Act 22 of 1957) (" the Act "), before the Agricultural Income-tax Officer, Mysore Circle, Mysore, and, inter alia, claimed the following amounts as permissible deductions for the relevant assessment years. Particulars CRP 1976-77 1977-78 1978-79 1979-80 1980-81 Nos. 3556/83 3554/83 3558/83 3557/83 3555/83 Rs. Rs. Rs. Rs. Rs. 1. Salary to poojari of the temple 3,570.32 4,201.00 6,101.35 6,313.00 6,449.83 2. Pooja expenses 1,160.41 1,902.93 1,407.49 1,000.00 3. Stock exchange listing fees - 300.00 300.00 2,000.00 1,000.00 4. Expenditure incurred on serving - 375.88 1,111.32 505.00 1,222.10 food and other refreshments to officers of various Government Departments and audit staff 5. Auditor's fee for tax matters 864.00 1,688.00 2,379.00 3,340 00 6. Donation to Cyclone Relief 6,000.00 Fund, Karnataka 7. Auditor's fee for certification 450.00 800.00 work 8. Salary paid to teachers of 2,662.82 2,745.00 - the school in the estat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he agricultural income,-- (i) in the case of any firm, any payment of interest, salary, bonus, commission or remuneration made by the firm to any partner of the firm; (ii) in the case of any company, any expenditure which results directly or indirectly in the provision of any remuneration or benefit or amenity to a director or to a person who has a substantial interest in the company or to a relative of the director or of such person, as the case may be, if in the opinion of the Agricultural Income-tax Officer any such expenditure is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by or accruing to it therefrom ; (iii) any sum paid on account of wealth-tax under the Wealth-tax Act, 1957 (Central Act XXVII of 1957)." This section is analogous to section 37 of the Income-tax Act, 1961 I.T. Act "), and a Division Bench of this court consisting of Jagannatha Shetty J. (as his Lordship then was) and Rajasekhara Murthy J. has expressed that view. But, in that case or in any other cases decided by the Supreme Court or this court brought to our notice, they had no, occasion to examine a similar claim and pronounce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the terms " agricultural income " must be liberally construed and the expenditure incurred must have reasonable nexus to the same are well settled by several rulings. We must examine the claim of the assessee on salary paid to the poojari and pooja expenses and other expenses founded on section 5(1)(k) of the Act, with due regard to the above principles and the language of the section which is more important. Before us, the Revenue has not disputed the genuineness and reasonableness of the expenditure incurred by the assessee on the salary to the poojari and pooja expenses. Even the Tribunal, the final fact-finding authority under the Act, had not doubted the same. We must examine only the legality of the claims made by the assessee. A Hindu temple, a Muslim mosque or a Christian church are all places of worship by the followers of those religions or faiths. A company, which is only a juristic person, cannot claim to profess, practise or follow any religion or faith. Even assuming that the assessee is an individual, then also the faith of that assessee cannot and will not be the faith of all employees of the estate. At the highest, the Hindu temple constructed and maintai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. When questioned, the learned counsel for the Revenue conceded that if the assessee had incurred some expenditure on the erection of a club for the workmen, it would have been entitled to claim a deduction from its taxable income, but he submitted that since the amount had been spent for a religious purpose, the assessee could not claim any benefit unless its case fell squarely within the ambit of section 80G of the Act. We are unable to accept this contention. If the workers can overcome their boredom by playing cards in a club, we see no reason for holding that they cannot achieve the same result by singing hymns in a temple. Besides, we see no reason to place any curbs on the discretion of the assessee to provide the type of recreation, which, according to it, would best advance the interests of its business. What we have to see is whether the recreation provided, even if it be in the nature of religious activity, has a direct nexus with the welfare of a class of workers engaged by the assessee or not. If the answer to this proposition is in the affirmative, it is wholly immaterial if the recreation provided is directly or indirectly connected with the religious tenets of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rectness of the amounts spent or the desirability or otherwise of spending amounts on the officers visiting the estate. Both on principle and authority, it is not possible to hold that the expenses on officers visiting the estate had been laid out wholly and exclusively for deriving agricultural income. We see no merit in this contention of Sri Kumar and reject the same. Sri Kumar has urged that the authorities had acted illegally in disallowing the auditor's fee for tax matters and certification work, viz., items Nos. 5 and 7 set out earlier. In Nilgiri Plantations Limited v. State of Karnataka (C. R. P. No. 1727 of 1980 decided on 10-2-1984), a Division Bench of this court consisting of Jagannatha Shetty J. (as his Lordship then was) and Rajasekhara Murthy J. examining a similar claim had found that the same was an allowable deduction under section 5(1)(k) of the Act. Sri Rajendra Babu has not been able to point out any good ground for not applying the principles enunciated by this court in Nilgiri Plantations Limited's case. We are, therefore, of the view that these claims of the assessee deserve to be allowed. Sri Kumar has urged that salary paid to teachers of the sch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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