Expenses incurred on cultivation for adequate and steady supply of medicinal plant are allowable even if no agricultural activities done by assessee directly

Sami Labs Ltd Vs DCIT (ITAT Bangalore) – Assessee had to incur cultivation expenses to ensure adequate and steady supply of coleus plants from the farmers which were an essential input for the continuous processing in research and development activities of the assessee. Thus, these expenses incurred by the assessee for a commercial expediency and were wholly and exclusively for the purpose of its business. In essence, the authorities  were not justified in disallowing the cultivation expenses of Rs.90.64 lakhs claimed by the assessee.

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