Proration of expenses

Taxpayer contended that proration of expenses was not a valid concept and specific expenses should be allocated to the respective sources of receipt; that voluntary contribution simply entailed receipt of cheques and deposit thereof in the bank; and that huge expenditure could not be related to the simple collection of voluntary contribution involving only receipt of cheques and deposit of the same in the bank

Validity

Main function of the taxpayer was inspection of rice and the extent of this mammoth exercise relating to certification of quality of rice could be very well comprehended

Department failed to rebut the contention of the taxpayer that collection of voluntary contribution simply entailed receipt of cheques and depositing the same in banks

Rupees 15,10,894 and Rs.2,549,505 could not be spent for collection of Rs.2,200,500 and Rs.1,900,000 respectively

Keeping in view overall facts of the case, working of the organization, the nature of voluntary contributions and rice inspection and affidavits submitted by the Secretary General of the taxpayer, it was ordered that the expenses claimed relating to voluntary contributions be allowed.