COMMISSIONER OF INCOME TAX Vs. HINDUSTAN ZINC LTD

JUDGEMENT

(1.) THESE two appeals under Section 260A for asst. yrs. 1989 -90 and 1991 -92 and IT Ref. No. 58 of 1999 relating to the asst. yr. 1990 -91 relates to the same controversy about the claim of the assessee to deduction of certain amount claimed by it as outright expenses incurred by it for the welfare of its employees under an obligation arising from the agreements between the assessee and its employees which were in operation during the relevant period and obligating the assessee to incur such expenses at the pains of punishment for non -compliance thereof under the Industrial Disputes Act.

(2.) HOWEVER , the audit report submitted by the auditors of the company shows that there was auditors' note that the expenses are not eligible for deduction for computing the total taxable income of the assessee under Section 40A(9) of the IT Act, 1961. The said provision reads as under:

(3.) THE expenses in question relate to amount paid towards activities carried under the welfare fund at the mine sites; to the staff club run by the members of the staff; to the Central Public School for securing admission and educational facilities for its employees and to subsidise the canteen.