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TMI Blog1973 (11) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... may now be stated : "Whether, on the facts and in the circumstances of the case, the contributions by the assessee to the political parties through the Punjab Motor Union, Chandigarh, were allowable under section 37?" It will appear from the frame of the question that it is admitted that there were contributions by the assessee to the political parties through the Punjab Motor Union, Chandigarh, and the only question is whether they were allowable deductions. The assessee is a transport company. Its route permits were to expire on June 30, 1969. There was a threat of complete nationalisation of the transport business and in this connection reference may be made to the Notification No. 12748-IHT-69, dated 19th November, 1969, Transpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter-State routes (whether existing or new) other than those specified in (i)(b) above shall be undertaken by the Punjab Roadways exclusively. 6. The provisions of this scheme shall have effect for a period of seven years from the date of publication of this notification in the Official Gazette, whereafter one-third of the operations of the private operators shall be taken over by the Punjab Roadways each year." In the face of this, the transporters formed a common forum to prevent nationalisation. This forum was styled as the Punjab Motor Union. According to the assessee, all the transporters contributed funds to that forum and that forum donated the money so collected to different political parties. It is stated by the assessee that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein the case before their Lordships of the Allahabad High Court in J. K. Cotton Spg. Wvg. Mills Co. Ltd. v. Commissioner of Income-tax was also considered. In Orissa Cement Ltd. v. Commissioner of Income-tax, the facts were as follows : "The assessee claimed deduction of Rs. one lakh contributed to the Congress party as, an expenditure laid out wholly and exclusively for the purposes of its business claiming (i) that its factory was situated at a place far away from Calcutta and other places and the supply of coal, packing bags and cement entailed problems which were solved by the Government ruled by the Congress party and (ii) that the Government had given to the assessee an interest free loan of Rs. 50 lakhs and had also subscribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he analysis of it only comes to this, that the claim has been disallowed on the ground that the money collected by the Motor Union is not shown as to how it had been expended. Beyond this all other material facts bearing on the matter have been accepted by the Tribunal. These facts we have already set out earlier. The further fact is also there that the assessee was granted extension for a period of seven years after the expiry of the route permits on 30th June, 1969. Thus, there is a clear connection between the contribution and the business of the assessee because it got over the notification that was issued on 19th November, 1969. On these facts, the only irresistible conclusion is that the expenditure was wholly incurred to save the bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be said that 'the carrying on of vanaspati business was not hampered at all by any order of the Government'. is true that the Government had not passed any order but if the Bill had been allowed to become a law the threat would have been real. As there was lot of agitation in favour of the Bill, it was circulated for eliciting public opinion and it transpired that one of the ways was not to impose a total ban on the manufacture of vanaspati ghee but also to make a provision for compulsory colourisation of vanaspati. That would have impaired the trade, although there would have been no complete ban on its manufacture and sale. In order to preserve the status and reputation of vanaspati ghee industry if propaganda had to be carried on it c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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