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TMI Blog1992 (8) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... came in appeal before the CIT(A) he too confirmed the action of the Assessing Officer. 4. Before us, Shri D.K. Kothari, the learned counsel for the assessee submitted that in fact the house property in question was previously used for business by the assessee-company itself and now that was given on rent to Ashok Woollen Mills Pvt. Ltd. for business purposes. It was stated that the main business of the assessee was growing and manufacture of tea. The house property at Allahabad was given on rent for business purposes which was subservient and incidental to the main business of the assessee. The assessee-company was getting Rs. 3,000 only as rent because the assessee-company took interest free loan to the tune of Rs. 2,35,000. He stated that the orders of the authorities below, therefore, considering the rental income as income from house property and not treating same as business income were unjustified. He also added that the addition of Rs. 35,250 on an estimated interest rate of 15% on the aforesaid interest-free loan was also not justified and against the norms of the business spheres. He also emphasised that since the house property was a business asset and, as such normal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd order dt. 24th July, 1991 in the assessee's own case in ITA Nos. 2824/C/88, 69/C/89 and 182/C/89 for the asst. yrs. 1978-79 to 1980-81 considered the expenditure as business expenditure. The learned counsel urged that the point in controversy was covered by the aforesaid orders of the Tribunal. 8. The learned Departmental Representative of the Revenue, of course, stated that in order to keep the issue alive the Department was contesting the matter. 9. Since the matter is a covered point and in the appeal record no distinguishing features have been brought with the facts of the earlier cases, and, as such, consistent with the earlier orders of the Tribunal we decide this issue in favour of the assessee. 10. Ground No. 5 relates to allowance of only Rs. 90,871 out of total expenditure of Rs. 13,51,133 under s. 40A(9) of the IT Act on account of expenses incurred by the assessee-company towards labour and staff welfare by making contributions to two hospitals established and run for labour and staff. 11. Shri D.K. Kothari, the learned counsel for the assessee submitted that the assessee-company was to establish two separate hospitals, namely, Suntok Hospital and Cheride ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the learned CIT(A) was justified. 13. We have considered the rival submissions on both sides and have gone through the appeal record. The Revenue authorities have allowed only Rs. 90,871 out of a total sum of Rs. 13,51,133 incurred by the company by making contributions to the two hospitals having taken recourse to the provision of s. 40A(9) of the Act. In order to have ease in discussion we may reproduce the provision of the aforesaid section hereunder: "40A(9) No deduction shall be allowed in respect of any sum paid by the assessee as an employer towards the setting up or formation of, or as contribution to, any fund, trust, company, AOP, BOI, society registered under the Societies Registration Act, 1860 (21 of 1960), or other institution for any purpose, except where such sum is so paid, for the purposes and to the extent provided by or under sub-cl. (iv) of cl. (v) of sub-s. (1) of s. 36, or as required by or under any other law for the time being in force." From the aforesaid provision it is manifest that this provision has two parts. The first part clearly prohibits deduction in respect of any sum paid by the assessee as an employer towards the setting u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in view of the provision of s. 40A(9) of the Act disallowed the said contributions but the Tribunal, considering the later part of the aforesaid s. 40A(9) held that the contributions made to 'Death Relief Fund' could not be disallowed. To our mind also, this order of the Madras Bench of the Tribunal squarely covers the matter in issue. So, regard being had to the entire facts and circumstances of the case and in view of the discussions as made above we do not think that the learned CIT(A) was justified to disallow the aforesaid amount of Rs. 12,52,000 which the assessee-company contributed to the two hospitals viz. Cherideo Purbut Hospital and Suntok Hospital which, of course, were run by the respective employees welfare trusts in which the employees were having a greater role to play. The order of the learned CIT(A) is unjustified and so we reverse his order on this point. 14. Ground No. 6 relates to disallowance of extra shift allowance on buildings and Ground No. 7 speaks about the disallowance of investment allowance on jeeps and motor cycles for that being not road transport vehicles. 15. Shri D.K. Kothari, the learned counsel for the assessee having referred to paragr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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