(Per : HONOURABLE MS JUSTICE SONIA GOKANI)
1. Revenue is in appeal challenging the order of the Income Tax Appellate Tribunal ('Tribunal' for short) dated 28.5.2010 proposing following question of law for our consideration :
"(I) Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in law in deleting disallowance of expenses towards payment of subsidy in the sum of Rs.56,93,735/- paid by the assessee to its Members as business expenditure under Section 37 of the Income Tax Act ?"
2. Having heard learned counsel, Ms.Mauna Bhatt and on having examined the material on record, we are of the view that present Tax Appeal is not required to be entertained for the foregoing reasons.
3. The issue pertains to payment of subsidy. The expenses towards the payment of subsidy paid by the respondent to its member was claimed as business expenditure to the tune of Rs.50,93,725/-. The Tribunal appears have noted submissions of both the sides and held that the similar issue had arisen in the preceding and subsequent years where Assessing Officer allowed such amount as expenditures. Moreover, on merit also, it found that assessee - respondent had nearly 5600 members and pesticides, seeds as well as other such items were sold at reduced price to farmers so as to help them to grow the crop of sugarcane. It was also further noticed that such crop was being purchased by the assessee - respondent in its entirety and that this amount was essentially used as subsidy for the purpose of business. Thus, the assessee having established this business connection, the Tribunal did not find any justification in disallowing the amount claimed as an expenditure under Section 37 of the Act.
4. Considering the fact that such claims of the assessee - respondent made in the preceding year and the subsequent years had been allowed by the Assessing Officer and that has been rightly weighed with the Tribunal. Again on merit, the Tribunal has rightly and justifiably held that the business connection could be well established by the assessee in giving subsidy to its members, we see no reason to interfere with the order of the Tribunal which is well considered both on facts and law. Since there is no further question of law in this appeal for our determination, present Tax Appeal deserves to be dismissed and stands dismissed accordingly.
(AKIL KURESHI, J.) (MS.
SONIA GOKANI, J.) (vipul) Top