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| The Tax Publishers2020 TaxPub(DT) 2104 (Pune-Trib) INCOME TAX ACT, 1961
Section 37(1)
Harvesing and transportation charges were incurred by Sugar Mills for ensuring an adequate and sustained supply of freshly cut sugarcane that was an essential input for continuous running of such Mills. These expenses were, therefore, incurred for a commercial expediency and were prima facie wholly and exclusively for the purpose of business and, therefore, allowable.
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Business expenditure - Allowability - Harvesting and transportation charges incurred by Co-operative Sugar Mill -
Assessee was a sugar factory engaged in manufacturing of white sugar from sugar cane. It claimed deduction of harvesting and transportation expenses incurred by it for procuring sugarcane from member farmers. AO disallowed deduction on the ground that farmers were bound under an agreement to supply sugarcane exclusively to assessee.Held: Harvesting and transportation charges were incurred by Sugar Mills for ensuring an adequate and sustained supply of feshly cut sugarcane that was an essential input for continuous running of such Mills. These expenses were, therefore, incurred for a commercial expediency and were prima facie wholly and exclusively for the purpose of busienss and, therefore, allowable.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2013-14
INCOME TAX ACT, 1961
Section 143(3)
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