TMI Blog1991 (4) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act, 1961, liabilities of the assessee were to be deducted from the value of total assets in computing the capital employed in the undertaking ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that house rent allowance and club fees paid to employees are perquisites for the purpose of section 40(a)(v) of the Income-tax Act, 1961 ? 3. Whether the Tribunal was right in holding that loss arising on theft of motor car and motor cycle cannot be allowed in computing income ?" Out of the above questions, we may straightaway answer question No. 1 as it is common ground between both counsel that the question of law raised thereunder is concluded by reason of the retrospective ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt in publicity. The Appellate Assistant Commissioner also held that these amounts were not paid with the intention to benefit the employees and, therefore, the payment of such club fees should be considered to have been made for promoting tile business of the assessee as it could not be disassociated from the assessee's business. In this view of the matter, the Appellate Assistant Commissioner reversed the finding of the Income-tax Officer and deleted the disallowance made by the Income-tax Officer under section 40(a)(v). The Tribunal neither went into this issue in detail nor did it record any finding with regard to the aspect of the matter dealt with in detail by the Appellate Assistant Commissioner. It cursorily observed that these amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Officer. In our judgment, considering the clear finding given by the Appellate Assistant Commissioner, without contrary finding thereto by the Tribunal, we must accept the facts as found by the Appellate Assistant Commissioner. Consequently, the payments must be allowed as business expenditure not falling within the mischief of section 40(a)(v). The house rent payment being a cash amount paid would be covered by the ratio of the decision in Indokem [1981] 132 ITR 125 (Bom). We, therefore, answer question No. 2 in the negative and in favour of the assessee. Coining next to the third question, it appears that one scooter and one motor car belonging to the assessee were stolen during the relevant previous year. These vehicles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrap value, if any, fall short of the written down value thereof ..." On facts, it is clear that the vehicles concerned could not be said to have been "sold", "discarded" or "demolished" in the previous year. But the last contingency contemplated under this clause is "destroyed". In our view, the expression "destroyed" used in this section has a wider connotation than mere physical destruction. It also applies to a case where the use of the asset is denied to the assessee in its business for an indefinitely long duration, even though there may be no evidence of its physical destruction. In our view, where the asset of the nature described in the section becomes unavailable to the assessee for an indefinitely long period albeit on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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