2010 (11) TMI 73 - HC - Income Tax

Lease agreements - genuine transaction and as such the lease rentals paid by the assessee is an allowable deduction - contribution made to Molasses Reserve Fund is a statutory fund - Held that - there is no illegality in the Lease agreements - as the contribution made to Molasses Reserve Fund is a statutory fund is concerned, it covered by the judgment of the Supreme Court in the case of Commissioner of Income Tax V. New Horizen Sugar Mills (P) Ltd. (2002 -TMI - 40368 - SUPREME Court) - Appeal is dismissed

Summary

The High Court of Allahabad dismissed an appeal against the Income Tax Appellate Tribunal's order for the assessment year 1999-2000. The Tribunal found lease agreements genuine and allowed lease rentals as a deduction. Contribution to Molasses Reserve Fund was considered a statutory fund and deductible as business expenditure. The Tribunal's decision was upheld based on legal precedent, leading to the dismissal of the appeal.