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1 - 10 of 21 (0.24 seconds)The Additional Commissioner Of ... vs Kuber Singh Bhagwandas on 13 October, 1978
25. Strong reliance is placed by Mr. Anjaneyulu upon the Full Bench decision of the Madhya Praaesh High Court in Addl. CIT v. Kuber Singh Bhagwandas [1970}] 118 ITR 379 (MP). Counsel submitted that facts of that case are almost identical with the facts herein and, therefore, the principle of that decision should govern the present case as well. It is, therefore, necessary to briefly notice the facts of that case,. In 1967, the Govt. of Madhy pradesh issued the Madhya Pradesh Grtam (Export Control) Order, 1967, under s. 3 of the Essential Commodities ACt. Under this Order, export of gram was prohibited expect under and in accordance with a permit issued by the State Government, or the authorities specified by it in that behalf. The traders in Madhya Pardesh has accumulated large stocks of pulses and gulabi chana. Their association made a representation to the Chief Minister to allow that export of the said items outside the State, by lifting the ban. It also offered to place the services of the mercantile community at the disposal of the Government to to relive the distress of the people of the famine affected areas raging in 12 districts that year. Thereupon, the Chief Minister addressed a letter to the president of the association, stating that the Government has decided to allow liberally permits for the export of gulabi chana and pulses outside the State, and also bringing to the notice of the trading community that the Kisans and labourers were undergoing untold hardship on account of drought condition in a part of the State. He observed that since the merchants were bound to earn enormous profits as a result of allowing them to export the said goods outside the State, they may contribute a portion of such profits to the Chief Minister's Drought Relief Fund to be used for relieving the distress of the famine stricken people. Accordingly, the association decided to deposit Rs. 30 per quintal of Gulabi Chana and Rs. 5 per quintal for the export of pulses into the bank to the credit of the Chief Minister's Drought Re; life Fund, and to enclose the supplicate receipts obtained from the bank, to the applications for export permits. The Tribunal found that, though the payments were voluntary, yet the regularity and the mathematical accuracy between the amount of contribution and the quantity of goods for which the export permits were granted showed that such payment was a pre-condition for the grant of export permits. It also held that the amount so paid has a direct bearing and nexus with the business of the assessee nd that until and unless the said amounts were deposited, d the assessee could not export with gulabi chana or pulses, outside the State. The Tribunal held that, for the above, reasons, the payments were liable to be allowed as business deduction under s. 37(1). The full Bench of the Madhya Pradesh High Court held that though there was a direct connection between the amount of contribution made and the quantity for which the export permit was granted and also that the object behind the donations was to obtain permits which were not otherwise forthcoming, yet the expenditure having been incurred in the interest of the assessee; s business it was eligible for deduction under s. 37. The court further observed that, in making the conditions, the assessee did not contravene any law, nor were the donation as penalty for infraction of law. The court also held that the mere fact that the donations were voluntary and that some members got permits even without making donation was not crucial for determining whether the donations constituted business expenditure allowable under s. 37(1). It is significant to notice that the question whether the payments made were opposed to public policy was not raised or considered in the said decision. The only point considered was whether, such payment violated any law and it was found that no law as such was violated. The question referred to us in these referred cases is not whether the payments contravened any law but the public policy.
Section 3 in The Advocates Act, 1961 [Entire Act]
The Advocates Act, 1961
Commissioner Of Income Tax, Andhra ... vs Maddi Venkataratnam & Co. (P.) Ltd. on 26 November, 1982
So far as the last two cases are concerned, a bench of this court has refused to follow the same in R. C. No. 73/1977, dated November, 26, 1982 (CIT v. Maddi Venkataratnam & Co. (P.) Ltd. [1983] 144 ITR 373), referred to above. Similarly, if the first two decision are understood as laying down the proposition that even an illegal payment is entitled to be deducted under s. 37, we must express out respectful dissent therefrom.
Additional Commissioner Of Income-Tax vs Badrinarayan Shrinarayan Akodiya on 18 July, 1975
CIT v. Badrinarayan Shrinaryan Akodiya , relied upon for the Department, in so far as it holds that voluntary donations cannot be allowed as business deduction under s. 37 cannot be correct Mr. Anjaneyulu then relied upon the decision of the House of LOrds in Morgan (Inspector of Taxes) v. Tate & Lyle Ltd. [1954] 26 ITR 195 (HL), where the expenditure incurred by a sugar refining company in a propaganda campaign to oppose the threatened a nationalization of the industry was held to be an expenditure wholly and exclusively laid out for th purposes of the company's trade for the reason that it was laid out to preserve the assets of the company form seizure, and to enable it to carry on the business and earn profits. But carrying on a propaganda against a proposed legislative or executive measure is different from paying a certain specified amount of money as a condition for the discharge of official duties.
Gherulal Parakh vs Mahadeodas Maiya And Others on 26 March, 1959
14. Mr. Anjaneyulu then argued that the ground of public policy is an "unruly horse" and cited before us some decision disclosing reluctance on the part of some judge to mount it for the fear of being unable to dismount. He also submitted that the ground of public policy is not a static one, and is liable to change with the changing times. We can do no better than answer this contention in the words of Subba Rao J. (as he then was), in Gherulal Parakh v. Mahadeodas Maiya . The learned judge said (p. 795) :
Sassoon J. David & Co. (P) Ltd., Bombay vs C.I.T., Bombay on 3 May, 1979
24. Mr. Anjaneyulu then relied upon the decision of the Supreme Court in Sassoon J. David and Co. P. Ltd. v. CIt , to contend that, ordinarily, is is for the assessee to decide whether any expenpenditure should be incurred in the course of his or its business, that such expenditure should be incurred in the course of his or its business, that such expenditure can be incurred voluntarily and that, so long as it is incurred for promoting the business and to earn profits the assessee is entitled to claim deduction of that amount, though there was no compelling necessity to incur such expenditure. While the said principle is unexceptionable, a lime must be drawn where the expenditure is for a purpose which is forbidden by law, or is opposed to public policy. In this case, the Supreme Court has no occasion to consider this aspect'; and, therefore we fail to see how this decision advances the assesses case.
Commissioner Of Income-Tax, Madras vs Coimbatore Salem Transport (Private) ... on 21 January, 1966
26. Mr. Anjaneyulu then relied upon the decision CIt v. Coimbatore Salem Transport (P.) Ltd. [1966] 61 ITR 480 (Mad), where the Tribunal found that the tips" and mamools paid to the transport official were "grease to run the bus business smoothly and that they must be allowed as business deduction. The Madras High Court held that though tips Tribunal that the said expenditure was inevitable if the assessee has to carry on its business and did not pertain to anything illegal or improper the deduction was rightly allowed.
Commissioner Of Income-Tax vs Ramakrishna Mills (Coimbatore) Ltd. on 19 December, 1972
27. The next decision of the Madras High Court relied upon is in CIt v. Ramakrishan Mills (Coimbatore) Ltd. [1974] 93 ITR 49, and another decision in Cit v. Sree Rajendra Mills ltd. reported in the same volume at page 122, where it was held that even a payment made to the managing agent contrary to s. 348 of the Companies Act was eligible for deduction under s. 10(2) (xv) of the 1922 Act, so long as it was warranted by business expendiency.