Law:

Section:

I. Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Voluntary contributions) - Assessment years 2003-04 and 2004-05 - Assessee company was engaged in business of manufacturing and selling petrochemicals - It made certain contribution to various industries which Tribunal held to be revenue in nature - Tribunal had merely followed and applied its earlier orders for prior assessment years in case of this very assessee and on same question - Whether such factual findings could not be termed perverse and did not give rise to any substantial question of law - Held, yes[Para 9][In favour of assessee] II. Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Repairings) - Assessment years 2003-04 and 2004-05 - Assessee incurred expenditure on relocation of reactor within factory as it was not functioning properly at place where it was originally installed - Whether such expenditure incurred by assessee for rationalizing, better administration and modernization of its machinery with a view to obtain maximum benefit out of existing resources, could not be treated to be a capital one and hence was allowable - Held, yes - [Para 19] [In favour of assessee] III. Section 37(1) of the Income-tax Act, 1961 - Business expenditure (Employees' welfare) - Assessment years 2003-04 and 2004-05 - Assessee company claimed deduction on contribution made to various clubs ran by and meant for staff and their family at various places - Assessee stated that this expenditure was incurred to facilitate management of various activities of employees or their families and these were not matters where it could be said to be incurring any expenses - Whether, there being a dispute as to whether expenditure was incurred for business or it was merely reimbursement appeal was to be admitted on this point - Held, yes [Paras 22 & 23][In favour of revenue] CASE REVIEW-II CIT v. Abbott Laboratories (I) (P.) Ltd. [1993] 202 ITR 818/69 Taxman 214 (Bom.) (para 19)followed. CASES REFERRED TO CIT v. Madras Auto Services (P.) Ltd. [1998] 233 ITR 468/99 Taxman 575 (SC) (para 11), Assam Bengal Cement Co. Ltd. v. CIT [1955] 27 ITR 34 (SC) (para…

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