ORDER
K.K. Gupta, Accountant Member
1. to 5. [These paras are not reproduced here as they involved minor issues]
6. With respect to the second issue agitated by the Revenue, the learned Counsel submitted that no monitary limit has been assigned to claim pooja expenses which are invariably incurred in the business premises for the purpose of business. The details furnished by the assessee clearly indicate that the monthly Dakshina being salary given to the Poojari and expenses for Prasad etc. are incurred on various religious occasions which did not call for any disallowance insofar as the case laws relied upon by the learned CIT (Appeals) are squarely applicable to the facts of the assessee’s case. He fully supported the order of the learned CIT (Appeals) on this issue as well.
7. On the next issue the learned Counsel submitted that the temple was under construction and was in the factory premises of the assessee which remains undisputed. Therefore, the very pooja which is being performed in the temple has been considered by the CIT (Appeals) for the business purposes could not isolate the construction of temple for any other purpose on which the proportionate interest considered by the Assessing Officer as having been met out of the borrowed funds on which interest has been charged in the profit and loss account without establishing nexus was considered fit for deletion by the learned CIT (Appeals).
8. We have heard the rival contentions and perused the material available on record. The first ground agitated by the Revenue stands covered against the Revenue insofar as the learned DR has rightly conceded the applicability of various decisions of the Tribunal and more so the decision in Addl. CIT v. Vestas RRB India Ltd. as submitted by the Learned Counsel.
9. On the second and third grounds agitated by the Revenue, however, we do find that the business purpose for performing pooja’s throughout the year and constructing the temple in the factory premises has not been established by the assessee. The case laws relied upon by the learned CIT (Appeals) considered the allowability of pooja expenses for specific purpose in order to bring peace and harmony amongst the labour-oriented factory which involves various sentiments and religious fervor. In view of the Assessing Officer mainly recurring expenditure for performing pooja was not for the purpose of business insofar as the Poojari was maintaining a temple with Daxina or salary could not be assigned to any business conducted by the assessee. The learned CIT(Appeals) erred in considering that all the expenses incurred under the guise of pooja could be related to business activity of the assessee was not on the basis of facts otherwise noted by the Assessing Officer. Before us also the learned Counsel has not been able to specify the major pooja performed on which expenditure stands incurred and considered by the appellate authorities holding it to be incurred for the purpose of business of the assessee. The regular recurring expenditure for performing pooja in the temple in the premises of the assessee do not by any method indicate are for the purpose of assessee’s business. A temple belongs to every one who wants to patronize the temple. It becomes to tally personal insofar as the religious sentiments are personal. The claim for expenses as a matter of regular incurrence thereof become habitual which was not the case as considered by the Gujarat and Allahabad High Courts decisions insofar as a temple by the very name it suggests is non-business entity when a prayer is to be performed first leaving all business aside. The nexus for establishing the construction having been met out of the borrowed funds was clearly established by the Assessing Officer insofar as it was under construction which was shown by the assessee as capital work in progress. The borrowings, therefore, were utilized in the construction which has not been disputed by the assessee. Therefore, we do not find merit in the deletion of addition of Rs. 50,000 and Rs. 25,000 being the proportionate interest on the investment in construction of the temple as relating to the business of the assessee. The order of the learned CIT (Appeals) on these two grounds stand reversed and the order of the Assessing Officer is restored insofar as the assessee has not been able to establish the business purposes involved in the incurring of such expenditure.
10. In the result, the appeal filed by the Revenue is partly allowed wherein ground No. 1 has been dismissed and ground Nos. 2 and 3 are allowed.