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2011 (2) TMI 962 - AT - Income TaxDisallowance of travelling expense - The dispute is regarding computation of disallowance under rule 6D which the AO had done with reference to each trip of the employee - Held that:- As in case of CIT v. Aorow India Ltd. [1997 (7) TMI 92 - BOMBAY High Court] and the decision of the Tribunal in the assessee's own case for assessment year 1994-95 held that ceiling laid down in rule 6D(2) is on the expenditure incurred in connection with each day of the journey and if calculated in accordance with the said rule for each day of travelling it would make no difference whether the calculation of allowable expenditure is made for each trip of journey or for all the journeys in the year taken together - no infirmity in the order of CIT(A) computing disallowance with reference to each trip of the employee - Decided against the assessee. Disallowance of Guest House expenses - Held that:- The issue is settled by the judgment of Britannia Industries Ltd. v. CIT [2005 (10) TMI 30 - SUPREME Court] in which it has been held that there being a specific provision for Guest House expenses under section 37(4)(iv) all expenses relating to Guest House such as repair, depreciation, etc. will be covered by that specific provisions - disallowance upheld - Decided against the assessee. Disallowance of 25 per cent of entertainment expenses - Held that:- The issue was covered against the assessee by the decision of Tribunal in assessee's own case in assessment year 1994-95 wherein held that 25 per cent of the entertainment expenditure incurred in hotels should be treated as that pertaining to the employees accompanying the guests as against 50 per cent made by the Assessing Officer. Facts this year are identical therefore respectfully following the decision of the Tribunal in assessment year 1994-95 confirm the order of the CIT(A). Regarding cash payment - disallowance u/s 40A(3) - Held that:- The assessee had not been able to establish that the payments had been made under exceptional circumstances - Decided against the assessee Regarding interest on money borrowed - Held that:- It is a settled legal position that whether the two businesses are the same business or different business does not depend upon the nature of two businesses - Though the employees and funds are separately allocated for different units they are depended upon the head office for raising of funds and employees are transferable from one unit or another - assessee had raised funds for setting up of two cement units at Raipur and Shambupura and steel unit at Vikramspat Salav - The new unit being set up by the assessee was integral part of the same business and therefore interest on money borrowed has to be allowed as deduction - Decided in favor of the assessee
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