COMMISSIONER OF INCOME TAX Vs. MADURA COATS LTD.

JUDGEMENT

(1.) BY framing the following questions of law, the Revenue has come up on appeal under s. 260A of the IT Act :

(2.) THE relevant asst. yr. is 1989 -90. The facts of this case are as follows :

(3.) THE assessee is engaged in the business of manufacture of yarns and threads. For the asst. yr. 1989 -90, the assessee claimed a deduction of Rs. 5,61,668 spent on community assistance programme as business expenditure. The AO disallowed the same stating that shown the philanthropic mind of the company, but not the commercial expediency. On appeal by the assessee, it was contended that the welfare measures were taken mostly in the vicinity of the assessee's manufacturing units, therefore their employees would also be benefited. A part of the expenditure was for maintenance of gardens and was in the nature of advertising expenditure. The CIT(A) however upheld the disallowance made by the AO. The assessee filed a second appeal before the Tribunal. The Tribunal, allowing its own order for its earlier years, held it is an allowable expenditure. Aggrieved against that order, the Revenue has come up with the present appeal.