VARADHALAKSHMI MILLS LTD Vs. ADDITIONAL INCOME-TAX OFFICER

JUDGEMENT

(1.) This appeal relates to the computation of income of the assessment year 1979-80.

(2.) This para is not reproduced here as it involves a minor issue.]

(3.) The second point relates to the donation made by the assessee to the Chief Ministers Public Relief Fund. The authorities below were of the view that the assessee would not be entitled to the deduction of this amount as an expenditure incurred for the purpose of the business and the deduction under section 80G of the Income-tax Act, 1961 (the Act) would not be available unless these are vouchers to support the payments. In this appeal, the assessee has claimed that vouchers are available for verification land it is also stated that the donation itself was made because there was flood in the hereby Vaigai river which affected the workmen of the assessee-company and it was in inducement to get relief to the workmen who were affected by the floods. The contention of the revenue was that the assessee had not strictly proved the nexus between the donation and the business of the assessee, inasmuch as, no public official would support the claim of the assessee that any pressure was brought on the assessee to make a donation for the purpose of granting any legitimate relief to the assessee which was due. We are of the opinion that it is not a question of proof because the very statement of the assessee that the donation was made for business expendiency and also to get the benefit to the workmen, supports the claim, for it cannot be rejected out of hand. Such claims are incapable of strict proof. But according to the revenue, it would not mean that we would accept heresay evidence to show any pressure being brought on the assessee for making such donations so as to consider the donation which should normally be a voluntary philanthropical gesture as a calculated payment laid out for the purposes of the business. The correct approach, in our view, is quite different. There is no doubt the local knowledge that is, knowledge which is derived by judges or Members of the Tribunal as having come to their possession as persons in the locality or as persons who were independently concerned with the relevant local affairs, is not inadmissible in evidence and could be relied on to decide an issue. An example of such local knowledge is given in the case of Mothersdale v. Cleveland Bridge and Engg. Co.,1930 99 KB 261: