TMI Blog2010 (4) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... he revenue and against the assessee. - 60 of 2001 - - - Dated:- 26-4-2010 - CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE JITENDRA CHAUHAN Present: Mr. Pankaj Jain, Advocate, for the assessee-appellant Ms. Urvashi Dhugga, Advocate, for the revenue-respondent. M.M. KUMAR, J. This appeal filed under Section 260-A of the Income-tax Act, 1961 (for brevity, 'the Act'), challenges order dated 27.7.2000, passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh, in I.T.A. No. 838/Chandi/1994, in respect of Assessment Year 1987-88. The assessee-appellant has sought to raise the following substantial question of law:- "Whether the Tribunal was correct in law on the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have carefully considered the rival submissions and examined the facts, evidence and material on record. We have also referred to the orders of the authorities below and the decision of the ITAT in the case of the assessee for earlier year where the ITAT has held that rent paid in respect of the guest house was allowable deduction u/s 30 of the Act. We have also referred to the judgement of the Kerala High Court in the case of United Catalysts India Ltd. (Supra) where by referring to the provisions of subsections (4) and (5) of section 37, introduced w.e.f. 28th February, 1970, the High Court held that these clearly prohibited allowing deduction in respect of expenditure incurred for the maintenance of a guest house. The Hon'ble Kerala High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt, considered a case prior to the introduction of sub-sections (4) and (5) of section 37. The second decision which was rendered by the High Court of Gujarat, just followed the Bombay High Court's decision even though, by that time, sub-section (4) of Section 37 had been introduced. We are not inclined to follow the above decisions in the present case." Obviously, when ITAT Chandigarh Bench considered this case on 29.11.1994, it did not have the benefit of the judgement of the Kerala High Court which was delivered on 9th December, 1996. Besides, the Calcutta High Court in the case of CIT vs. Upper Ganges Sugar Mills Ltd. 206 I.T.R. 215 has also held that the language of sub-section (4) of section 37 of the Income Tax Act is quite emphati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with regard to building used as guest house as defined in Section 37(5) and the provisions of Section 31 and 32 would have been sufficient for that purpose. It is, thus, conceded that after February 28, 1970 (w.e.f. 1.4.1970) when amendment was incorporated by way of adding sub-section (4) of Section 37 of the Act, there was clear prohibition to allow deduction in respect of expenditure incurred for maintenance of guest house. Accordingly, he has submitted that the question stand already decided in favour of the revenue and against the assessee. 4. In view of the fair stand taken by Mr. Pankaj Jain, learned counsel for the assessee-appellant, Ms. Urvashi Dhugga has simply submitted for dismissal of the appeal as the matter is covered in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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