9911796707
TMI Blog1998 (8) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... ed after making deduction, namely, any sum paid in the previous year on account of any expenditure (not being in the nature of capital expenditure or personal expenses of the assessee) laid out or expended wholly and exclusively for the purpose of deriving the agricultural income. The language used in section 5(j) of the Act is analogous to that used in section 37(1) of the Income-tax Act, 1961, which allows deduction in respect of any expenditure laid out or expended wholly and exclusively for the purposes of the business. The facts, as stated by the Appellate Tribunal in connection with the deduction claimed, are that one Shri S. Sivaramakrishna Iyer, who was taken into service as a general manager of the company on contract basis initi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hion. Pension paid to an employee, who has gone out of service, can, in no case, be said to be a gratuitous payment. Pension is always paid to an employee for his past services. An employer, of course, does get the benefit while an employee is in service. But so many payments in the nature of pension, gratuity, etc., are made by employers to keep the members of the staff in good stead and any expenditure incurred on employees from that point of view is for commercial expediency, which does not take within its sweep only that expenditure which has immediate nexus with the income derived, but also other expenditures incurred to make the employment attractive, so that the employees, while in service, may continue to be loyal, sincere and hard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n service and it was paid on condition that the employee did not accept service elsewhere, the payment was made in the interests of the business and was allowable under section 10(2)(xv) of the Act of 1922, which is in pari materia with section 5(j) of the Act. The Madras High Court held that it is not difficult to appreciate that payment of pension was apparently thought of as a business expediency in the interests of the assessee's business and that, in fact, the premises of the resolution relating to payment of pension were as a part of the terms of service, as it is in the case at hand. In Purtabpore Co. Ltd. v. State of U. P., AIR 1970 SC 1578, the Supreme Court, interpreting the provisions of section 6(2)(b)(iv) of the U. P. Agricul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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