Delhi Cloth And General Mills Co. ... vs Commissioner Of Income-Tax
1984 Latest Caselaw 42 Del

JUDGMENT

Charanjit Talwar, J.

1. At the instance of the assessed, the following question has been referred by the Income-tax Appellate Tribunal for our opinion :

"Whether, on the facts and circumstances of the case, the sum of Rs. 3,15,000 paid to Indian National Congress is a permissible deduction under section 37(1) of the Income-tax Act, 1961 ?"

2. The assessed is a limited company carrying on business in textiles and Chemicals, etc. The assessment year in question is the year 1963-64. During this years, the company paid Rs. 3,15,000 to the Indian National Congress and claimed this amount as permissible deduction under section 37(1) of the Act. Its case was that the donation was incurred wholly and exclusively for the purpose of its business. The Appellate Assistant Commissioner of Income-tax confirmed the disallowance. Thereupon, the assessed appealed to the Income-tax Appellate Tribunal. The Tribunal following the consistent view of various High Courts including that of this High Court was of he opinion that the assessed had not been able to establish any link between the payment and its business and thus upheld the order appealed against.

3. We may not here that at the instance of the assessed, three references pertaining to assessment years 1958-59, 1960-61 and 1961-62, wherein a similar question relating to the disallowance of the donation made by this very company to the Indian National Congress under section 10(2)(xv) of the Indian Income-tax Act, 1922, were made by the Tribunal to this court. The question was answered in the negative and against the assessed, vide this court's reported judgment in Delhi cloth & General Mills Co. Ltd. v. CIT [1980] 125 ITR 96. In the said case, after noticing the unanimous view of several High Courts and following the decision of this court in Orissa Cement Ltd. v. CIT [1969] 73 ITR 14, it was held that no link between payment to the Indian National Congress and the business of the assessed has either been pleaded or established. In the present case also, the assessed has not been able to establish any link between the donation to the Indian National Congress and its business.

4. We, therefore, answer the question in the negative and against the assessed. The parties shall bear their own costs.