The Cuttack in 20 ITR (Trib)-OL 1 raised the question on the business compulsion of the assessee for incurring an expenditure for distribution of 51,000 mosquitoes nets to the residents of the mining area to prevent them from contracting malaria. The assessee happened to be a mines owner and the mines are located in forests and operation in the mines area affects the periphery in which several villages are located.
The bench held that the expenses towards distribution of mosquito nets, etc., against malaria eradication did not fulfil the criteria the test of commercial expediency. The precise reason to hold such dictum was that there was no business compulsion to distribute mosquito nets nor direction from the district periphery development committee constituted by the Government to incur such expenditure.
Keeping in view the natureand set up of business such expenditure may otherwise justify allowance in the next battle. For sure some mining workers may have been putting up in the near by villages too which would meet the test of business compulsion too.