1998 (6) TMI 59

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..... g out of the assessment of the respondent's income for the assessment year 1976-77 is, as to whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in deleting the disallowance of Rs. 71,088 being the farm expenditure incurred by the assessee. The assessee is a manufacturer of tractors and farm equipment and has a demonstration farm on an extent of 200 acres .....

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..... on the farm solely on the ground that it was expenditure on agricultural land, the Commissioner as also the Tribunal have held that the expenditure incurred on the farm had a direct nexus with the business carried on by the assessee and, therefore, qualifies as a deduction under section 37 of the Act. The running of the farm was not a distinct business of the assessee and the farm was maintained .....

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..... e view that only expenditure incurred in respect of a business activity giving rise to income, profits or gains taxable under the Act can be allowed as a deduction under section 10(2)(xv) and not otherwise." That was also a case where the expenditure claimed as a deduction had been incurred on agricultural land by the assessee which owned that land as an adjunct to its sugar factory. The cultiva .....

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