TMI Blog2007 (7) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... ated:- 31-7-2007 - D. MURUGESAN and P. P. S. JANARTHANA RAJA JJ. Mrs. Pushya Sitaraman for the appellant. None appeared for the respondent. JUDGMENT The judgment of the court was delivered by P. P. S. Janarthana Raja J.- This appeal is filed under section 260A of the Income-tax Act, 1961, by the Revenue, against the order of the Income-tax Appellate Tribunal, Chennai Bench "A", Chennai, in I. T. A. No. 2442/ Mds/94 dated October 21, 2003. On June 23, 2004, this court admitted the appeal and formulated the following substantial questions of law : "1. Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the compensation amount paid by the assessee to the land owners towards the und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same was disallowed. Aggrieved by the order, the assessee filed an appeal to the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) directed the Assessing Officer to treat the said expenses as business expenditure and deleted the addition of Rs. 6,57,000 and allowed the appeal. Aggrieved, the Revenue filed an appeal to the Income-tax Appellate Tribunal ("the Tribunal" in short). The Tribunal dismissed the appeal filed by the Revenue and confirmed the order of the Commissioner of Income-tax (Appeals). Hence, the present tax case by the Revenue. 3. Learned senior standing counsel appearing for the Revenue submitted that the amount paid by the assessee is not in the course of business and hence the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken to the press. There was a news item in the "Indian Express" on July 13, 1989, with the caption "when public safety takes a back seat". In that news it was stated that about 100 applications for building plans (including 50 for multi-storeyed buildings) were ratified and approved by the Government, overriding the objections of the Madras Metropolitan Development Authority. The assessee's site was mentioned as a typical example. It was alleged that no multi-storeyed building could be permitted since the abutting roads are only 12 metres and 19.15 metres wide, but this standard was done away with. It was also mentioned in the news item that it would cause great inconvenience to the other residents and would also pose a danger to the occ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrase "for the purpose of the business" and held at page 150, as follows : "The aforesaid discussion leads to the following result : The expression 'for the purpose of the 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 carrying on of a business ; it may co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... borrowed funds to a sister concern from the point of view of commercial expediency and not from the point of view whether the amount was advanced for earning profits." 7. Applying the above principles in the present case, we are of the view that the expenses incurred by the assessee is for the purpose of the business and hence the same is an allowable deduction in computing the income of the assessee. Both the first appellate authority as well as the Tribunal have given a concurrent finding that it is an expenditure which was incurred for the purpose of the business, and the order of the Tribunal is not a perverse one. The finding given by the authorities below is based on valid materials and evidence and we find no error or illegalit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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