1997 (7) TMI 18 - HC - Income Tax

Whether on the facts and in the circumstances of the case the Income tax Appellate Tribunal was right in disallowing the expenditure of Rs.1, 27, 577 under section 37(4) of the Income-tax Act 1961 which was incurred by the assessee on the residential accommodation maintained by it in its industrial township for the stay of persons connected with its business ? - Tribunal has rightly approached the matter and denied the depreciation to the assessee in respect of expenditure in the sum of Rs. 1, 27, 577. We answer the question in favour of the Revenue and against the assessee.

Summary

The High Court of Madhya Pradesh upheld the disallowance of expenditure on residential accommodation by an assessee for persons connected with its business. The court ruled that the specific provision under section 37(4) of the Income-tax Act overrides general provisions on depreciation, denying relief to the assessee. The judgment favored the Revenue over the assessee.