TMI Blog1976 (11) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessment year was 1967-68 for which the accounting year was the year ending on 31st December, 1966. The first amount represented the cost of construction of a building. It stood on an account called "Mill Colony School Building Account", and it was transferred to "Labour Welfare Account" during the close of the year. This amount represented what was spent by the assessee in the construction of an elementary school on the land belonging to the Palani Andavar Employees' Housing Co-operative Society. Part of the expenditure representing the amount in question was met by the assessee and the balance was met by the aforesaid society. On the completion of the building it was handed over to the Udamalpet Municipality to be run as a school ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g did not constitute an enduring asset to the assessee. As a matter of fact, the Tribunal itself points out in its order that the municipality wrote to the assessee on April 1, 1963, informing the assessee that it could not incur any expenditure of a capital nature and, therefore, requesting the assessee to put up a school building at the cost of the co-operative society to be handed over to the municipality for future maintenance. Therefore, even at the very inception the school building was not intended to be an asset of the assessee, but it was intended to be part of a welfare scheme for the educational facilities of the children of the employees of the assessee. Consequently, the conclusion of the authorities below that the expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49 (SC). In that case the assessee, who was engaged in the manufacture of sugar, used to advance seedlings, fertilisers and money to sugarcane growers under an agreement by which the growers agreed to sell the next crop of the sugarcane grown by them exclusively to the assessee at current market rate and to have the advances adjusted towards the price of the sugarcane to be delivered to the company. In a certain year, owing to drought, the sugarcane growers could not grow sugarcane and the advances remained unrecovered. A committee appointed by the Government recommended that the assessee should ex-gratia forgo some of its dues. The assessee, accordingly, waived its rights in respect of Rs. 2,87,422 and claimed this amount as a deduction un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price of one crop. The Oppigeders were to get the assistance not as an investment by the assessee-company in its agriculture, but only as an advance payment of price. The amount, so far as the assessee-company was concerned, represented the current expenditure towards the purchase of sugarcane, and it makes no difference that the sugarcane thus purchased was grown by the Oppigeders with the seedlings, fertiliser and money taken on account from the assessee-company. In so far as the assessee-company was concerned, it was doing no more than making a forward arrangement for the next year's crop and paying an amount in advance out of the price, so that the growing of the crop may not suffer due to want of funds in the hands of the growers. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of any write-off, such a claim can be allowed, only when the write-off is in relation to a trading transaction, where the money due to the assessee could not be recovered and, therefore, had to be written off. No such consideration applied to the present case. Under these circumstances, we are clearly of the opinion that the authorities below, including the Tribunal, were right in holding that the assessee was not entitled to any deduction of this amount. The result is that we answer the question referred to us in the negative and in favour of the assessee, as far as the amount of Rs. 12,039 is concerned, and in the affirmative and against the assessee so far as the amount of Rs. 20,550 is concerned. There will be no order a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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