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TMI Blog1986 (4) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee-company was running a Mentha Research Demonstration Centre at Bilaspur in Uttar Pradesh. The raw material for manufacture of 'Vicks' product was mentha oil. This is derived from grass like peppermint plant 'Mentha Arvensis'. The assessee-company had set up a farm in 'Terai' area of Uttar Pradesh with headquarters at Bilaspur to grow Mentha Arvensis. The assessee-company encouraged the cultivation of the said 'Mentha Arvensis' in the adjoining areas by other farmers. Before the ITO, the assessee claimed weighted deduction under section 35C of the Income-tax Act, 1961 ('the Act') as agricultural development allowance on expenditure of Rs. 8,92,246 as per revised claim. The ITO allowed the weighted deduction of expenditure of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee was entitled to weighted deduction in respect of expenditure of Rs. 1,03,094 on demonstration of modern techniques or methods of agricultural which fell under section 35C(1)(b)(ii). He, however, held that research expenditure were not entitled to weighted deduction. Similarly, he held that the assessee was not entitled to weighted deduction on distillation service expenses of Rs. 2,45,324 and expenditure of Rs. 1,25,330 claimed on scientific farming. 8. The Commissioner (Appeals), however, vide paragraph 10 accepted the assessee's claim in toto. He noted the assessee's contention that the assessee-company was the pioneer in introducing in India in 1965 cultivation of medicinal peppermint plant from which mentha oil was ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich was based on practical difficulties faced by the cultivators and that research and demonstration were inter-related and inter-linked. 9. Before the Commissioner (Appeals), reliance was placed on the Tribunal Bombay Bench's order in S. H. K. & Co. Ltd. (Bom.) for the assessment year 1974-75 (PB 27) where expenditure of Rs. 18,038 was held entitled to section 35C weighted deduction which was incurred on supply of fertilizers and chemicals, though a part of the said material was also used in the assessee's own farm and for the purpose of demonstration and experiments. The Tribunal held that the entire expenditure was entitled to weighted deduction because research was carried out with the object of finding out the feasibility of cultivati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghted deduction on (a) research expenses, (b) distillation services, and (c) scientific farming expenses, because, according to us, the said expenses would not be covered by section 35C(1)(b). 12. Scientific research can not be equated with demonstration. Research is essentially a 'systematic investigation towards increasing the sum of knowledge' (Chamber's Twentieth Century Dictionary, 1970 edn.).'Research' as per the Shorter Oxford English Dictionary, 1978 edn. means 'an investigation directed to the discovery of some fact by careful study of a subject; a course of critical or scientific enquiry.' 13. As per the Living Webster Encyclopedia Dictionary, 1977 edn., 'research' means 'deligent enquiry or examination of seeking facts or princ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... research is currently carried on. Hence, demonstration and research are independent activities. It is a wide spread complaint against our science teaching in schools and colleges that teachers are not interested in research and keep on teaching and demonstrating what they learnt decades ago. The Legislature in its wisdom has not allowed weighted deduction on research and has allowed it only on demonstration of or dissemination information. We cannot, therefore, enlarge the scope of the provisions of section 35C(1)(b)(ii) by including on expenditure on 'research' under the head 'Demonstration' or 'Dissemination of information.' 19. We, however, do not approve the ITO being meticulous in holding that the assessee's bifurcation of expenses be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of weight of peppermint plant but on its oil yield, it can not be said that the distillation plant is made available to cultivator for his use. If this argument be expanded, then a sugar-cane grower paid for his sugar-cane on the basis of sugar content of the cane, can be said to be availing of and using crushing facility of sugar mill and crushing department of sugar mill can be claimed to be tools and implements used by sugar-cane grower. Similarly, a seller of milk being paid on basis of fact content of milk is not availing of fat testing facility of milk dairy. 21. Distillation plant cannot be called a 'tool or implement' for use by cultivator despite the wide meaning given by the Calcutta High Court in Kanan Devan Hills Produce Co. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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