(1.) THE assessment year is 1992-93. The assessee, Madras Refineries Ltd., is a public limited company. As a good corporate citizen and as a measure of gaining goodwill of the people living in and around its industry which is to some extent a polluting industry, it provided funds for establishing drinking water facilities to the residents in the vicinity of the refinery and also provided aid to the school run for the benefit of the children of those local residents. It incurred an expenditure of Rs. 15,32,000 for that purpose.
(2.) THE AO declined to allow that expenditure on the ground that it was not an item of expenditure incurred by the assessee for earning the income earned by it in that year.
(3.) ON further appeal to the Tribunal, the Tribunal, after examining the records placed before it and having been satisfied that the money had in fact been spent in the manner claimed by the assessee, held that winning the goodwill of the people of the locality, helps in boosting the business in many ways. It allowed the entire amount claimed as a deduction.