9911796707
TMI Blog1980 (12) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... We have heard both sides and perused the connected records. 4. We will now take up the appeal in ATA 123/80 (relates to the asst. yr. 1978-79). Disallowance of Motor Car Expenses : The appellants claimed a sum of Rs. 28,875. The assessing authority disallowed 50 per cent of the car expenses as personal use i.e., Rs. 14,437. This was confirmed by the Asstt. Commr. The Authorised Representative for the appellant submitted that the appellant being a corporate body the question of treating any expenditure as 'personal' does not arise; that the car was only used by the employees of the company for the purpose of company's business. We find from the order of the Asstt. Commr. that he had upheld the disallowance mainly on the ground that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er : "This expenditure is clearly a welfare measure incurred for the benefit of he employees and is wholly and exclusively for the purpose of the land. It is an admissible expenditure and is accordingly allowed". Following the same view, we hold that this sum of Rs. 7,451 is an admissible expenditure as the facts are similar. 7. Sales proceeds of rubber trees (Rs. 40,985) : The Asstt. Commr. upheld the addition on the ground that the expenditure for replanting and the maintenance expenditure of immature rubber trees and allowed under Agrl. IT Act. According to the appellants, the income from sale of rubber has to be treated necessarily as a capital gain. Reliance is placed on the decision of the Supreme Court in Commr. of Agrl. IT, Ke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the principles extracted earlier. 9. The next contention is about the inclusion of replanting subsidy of Rs. 5,475. The ld. Authorised Representative for the appellants contended that the subsidy received from the Rubber Board cannot be treated as a revenue receipt. This question has already come up for consideration before this Tribunal in ATA Nos. 106 and 107/80 dt. 9th Sept., 1980. After referring to the various provisions of the scheme it was held by the Tribunal that the subsidy is a revenue receipt taxable as agricultural income. The ld. Authorised Representative placed before us a copy of an unreported decision of the Karnataka High Court in Writ Appeal Nos. 355 to 357 of 1975 dt. 24th Feb., 1978 in his support. This Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the expenditure incurred for maintaining the rubber plantations". Following the same view, we hold that the subsidy is taxable as a revenue receipt. Even otherwise, it goes to reduce the Revenue expenditure and is also taxable. 11. In ground No. 6 the appellants disputed the following items of expenditure: 1. Profession Tax Rs. 125 2. Development expenses Rs. 8,721 3. Legal expenses Rs. 8,230 However, at the time of hearing, the ld. Authorised Representative submitted that he is not pressing these items. It is therefore unnecessary to consider this point. 12. We will now take up the appeal in ATA 124/80 (asst. yr. 1979-80). The first contention is about the disallowance of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only a tentative price which had to be discharged at the prevailing rates of exchange at the time of the respective payments, the payments related only to the purchase price of the machinery, the difference was on capital account and not allowable as business expenditure. 14. It was held in (1964) 51 ITR 164 (Mad) (C. Ramaswamy Ors. vs. Commr. of Agrl. IT, Madras) at page 166: "Interest paid on borrowed capital by an assessee is not a capital expense. Payment of interest is necessitated to raise the capital. The capital may be employed in several ways, like investment in a business or purchase of property. It is only the investment of capital that can be called the incurring of a capital expense. The liability to pay interest being on ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
