COMMISSIONER OF INCOME TAX Vs. MOHAN MEAKIN LTD.

JUDGEMENT

(1.) COMMON issue which is raised in all these appeals preferred by the Revenue concerns allowing the assessee the expenses incurred in Puja, Hawan, Kirtan etc., under s. 37(1) of the IT Act, 1961. The assessee is the same in all these appeals and issue relates to different assessment orders. Therefore, these appeals were taken up together for hearing.

(2.) THE brief facts are that the assessee company, as a welfare measure for its employees and staff members, had been incurring since its inception expenditure on Puja, Hawan and Kirtan. The assessee -company has units located at Solan, Ghaziabad, Lucknow, Mohan Gram and Kasauli. At these places there are sub -units also. Expenditure was incurred and debited in the books of account under the aforesaid heads. No disallowance has been made till asst. yr. 1975 -76. Thereafter attempts were made to disallow expenses but were deleted by the appellate authorities. From the asst. yr. 1984 -85 till 1989 -90, disallowances made were deleted by the Tribunal, which has attained finality.

(3.) FROM the asst. yrs. 1990 -91 till 2001 -02, however, the Assessing Officer (AO) started disallowing this expenditure. As per the AO, the expenditure incurred on Puja, Hawan, Kirtan, etc., cannot be said to have been incurred wholly and exclusively for the purposes of business of the assessee and there was nothing on record to prove that Puja, Hawan, Kirtan etc., were performed inside the factory premises. On this basis, relying upon the judgment of the Bombay High Court in Kolhapur Sugar Mills Ltd. vs. CIT (1979) 119 ITR 387 (Bom), the expenditure was disallowed. The CIT(A), however, did not accept the aforesaid view of the AO and allowed the expenditure, which view has been upheld by the Tribunal as well.