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TMI Blog1975 (4) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purposes of the business ? " The reference relates to the assessment year 1965-66. The previous year ends on March 31, 1964. The assessee is a manufacturer and seller of electrical pumps and motors. In the assessment year, the assessee advertised its products in souvenirs published by various organisations and institutions and claimed deductions of the sums paid to those organisations and institutions as charged by them for inserting those advertisements. The Income-tax Officer disallowed the claim of the assessee. On first appeal, a sum of Rs. 745 was only allowed by the Appellate Assistant Commissioner who rejected the rest of the claim by holding that the primary and dominant motive of the assessee in publishing the advertisem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the nature of the organisation or institution concerned and the amount of payment we see that in some of the cases that will be mentioned shortly the primary and dominant motive for the payment was charity and the payments were not out of considerations of business. " It is to be noticed here that the Tribunal allowed, amongst other claims, Rs. 250 paid to the Indian National Trade Union Congress, Rs. 50 paid to Rabindra Palli Sarbajanin Durgotsab Committee, Baranagar, and Rs. 100 to Loretto House, but disallowed Rs. 250 paid to the American Women's Club Welfare Fund, Rs 1,000 paid to Bharatiya Sanskriti Bhawan, two sums of Rs. 1,000 and Rs. 1,000 paid to the West Bengal Pradesh Congress Committee and Rs. 1,000 paid to Moral Rearmament by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the direct and immediate benefit for purposes of commercial expediency and in order indirectly to facilitate the carrying on of the business is, therefore, expenditure laid out wholly and exclusively for the purposes of the trade ......... The High Court also thought that expenditure, to fall within the terms of section 10(2)(xv), must be one for the purpose of earning income, and there was no material on the record to show that the expenditure was so incurred. If it is intended thereby to imply that the primary motive in incurring the expenditure admissible to deduction under section 10(2)(xv) must be directly to earn income thereby, we are with respect unable to agree with that view. " Dr. Pal also cited the case of Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was to make charity to those organisations ; and as section 37(1) of the Act uses the expression " wholly and exclusively for the purpose of the business " the assessee had failed to prove that those expenditures were laid out or expended wholly and exclusively for the purpose of the business of the assessee. It is true that on the facts and circumstances as found by the Tribunal we are to decide whether there is any material to hold that those expenditures were laid out or expended wholly and exclusively by the assessee for the purpose of its business as contended by Mr. Sengupta but the matter does not rest here, for Dr. Pal has argued that the Tribunal could not at all go into the motive and in any event there is no mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part, there is no nexus between the names of those organisations and the motive of the assessee. Moreover, the Tribunal did not put the Indian National Trade Union Congress, Rabindra Palli Sarbajanin Durgotsab Committee, Baranagar, and Loretto House into a separate group for the purpose of disallowing the payments made to the American Women's Club Welfare Fund, Bharatiya Sanskriti Bhawan, West Bengal Pradesh Congress Committee and Moral Rearmament. Therefore, the motive imputed by the Tribunal must be kept out of the field. Furthermore, the amounts paid to those organisations, in view of the documentary evidence on the record, do not prima facie establish the motive imputed to the assessee by the Appellate Assistant Commissioner and the T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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