M/S. PROCTOR and GAMBLE PVT.LTD. vs. THE C.I.T.B.C-V.

ITR/3/1998HC Bombay18 March 2009Bench: HON'BLE SHRI JUSTICE F.I. REBELLO, HON'BLE SHRI JUSTICE R.S. MOHITE3 pages

AI SummaryDismissed

What did the High Court hold?

The High Court answered questions 1(a) and 1(c) in the affirmative and against the assessee. For these, the Court relied on its previous judgment in Income Tax Reference No. 315 of 1988, concerning the same assessee and similar facts, which held that expenses on distillation services provided to cultivators were not admissible for deduction under Section 35C. The Court found no difference in the position regarding depreciation on such distillation assets. Regarding question 1(b), the Court agreed with the Tribunal's finding that transportation services provided to farmers were for transporting harvested crops, which had no relation to the goods, services, or facilities outlined under Section 35C(b). Therefore, this question was also answered in the affirmative and against the assessee. The reference was disposed of with no orders as to costs.

What were the facts?

The assessee, M/s. Procter & Gamble India Ltd. (formerly Richardson Hindustan Ltd.), sought weighted deduction under Section 35C of the Income Tax Act for assessment years not specified in the provided text. The dispute involved expenses claimed for provision of distillation services to farmers (Rs. 6,32,442), transportation services to farmers (Rs. 1,05,809), and depreciation on distillation assets (Rs. 1,65,291). The Income Tax Appellate Tribunal had rejected these claims. The matter was referred to the Bombay High Court as an Income Tax Reference.

What were the issues?

The High Court had to decide whether the Appellate Tribunal was justified in rejecting the assessee-company's claim for weighted deduction under Section 35C on three specific heads: 1. Expenses of Rs. 6,32,442/- incurred for providing distillation services to farmers. 2. Expenses of Rs. 1,05,809/- for transportation services provided to farmers. 3. Depreciation of Rs. 1,65,291/- on distillation assets. The assessee contended for the admissibility of these deductions. The revenue likely argued against the admissibility, as the Tribunal had rejected the claims. The judgment does not explicitly detail the arguments of each side but refers to prior judgments and findings of fact by the Tribunal.

Which sections of the Income-tax Act were involved?

Section 35C, Section 156(1)

AI-generated summary — verify with the full judgment below

K.J. IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX REFERENCE NO.3 OF 1998 M/s.Procter & Gamble India Ltd., ) (previously known as Richardson ) Hindustan Ltd.) ‘Tieciond, Dr.E. ) Moses Road, Bombay-11 )..Applicant V/s. The Commissioner of Income-tax ) Bombay City-V, Bombay ) Bombay-400 011 )..Respondent ---- Mr.P.S.Sahadevan for the respondent. Mr.J.D.Mistry with Ms.Payal Parikh, Ms.Nikita Kadam i/by M & M Legal Venture for the applicant. ---- Coram : F.I.Rebello & R.S.Mohite,JJ Date : 18.3.2009. Judgment :- (Per : R.S.Mohite,J) 1. The question of law referred to this Court under Section 156(1) of the Income-tax Act is as under :- 1. "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in rejecting the claim of the assessee-company weighted deduction under section 35C on :- (a) Expenses of Rs.6,32,442/- incurred under the head provision of distillation services of farmers ; (b) Expenses of Rs.1,05,809/- under the head transportation services provided to farmers ; (c) Depreciation of Rs.1,65,291/- on Distillation Assets ? 2. In our view, questions-1(a) & 1(c) are covered by our judgment passed in Income Tax Reference CNR No : HCBM020211861996 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:48:58

: 2 : No.315 of 1988 wherein in respect of the same assessee and on a similar factual background we have held that expenses on distillation services provided to the cultivator would not be admissible for a deduction under Section 35-C of the Income Tax Act. In our view, a position in relation to depreciation on such a distillation asset will not be different. In the circumstances, for the reasons which we have given in Income Tax Reference No.315 of 1988, we answer questions-1(a) & 1(c) in the affirmative and against the assessee. 3. As regards question-1(b), we find that the deduction was disallowed by the Tribunal in view of the orders passed for earlier assessment years. We find that the said rejection was based upon a finding of fact that the transportation services provided to farmers were in respect of transporting of crops after the same were harvested. Obviously, therefore this had no relation to any goods, services or facilities as outlined under Section 35-C (b). In the circumstances, we agree with the findings of the Tribunal. We answer this question in the affirmative and against the assessee. 4. In view of the answers given above, the reference is disposed off with no orders as to costs. Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:48:58

: 3 : (R.S.Mohite,J) (F.I.Rebello,J) Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:48:58 Powered by TCPDF (www.tcpdf.org)

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