TMI Blog2011 (12) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... record two pages of the brochure of Neemrana Hotels Private Limited. We are not inclined to accept the prayer made in the application for several reasons. This alleged brochure is taken out by Neemrana Hotels Private Limited and what is stated therein has not been verified by the Revenue. There was correspondence between the Assessing Officer and Neemrana Hotels Private Limited, which has been referred to in our order below. In case the appellant wanted to rely upon the said document, he should have filed it before the Assessing Officer and the Assessing Officer would have verified the correctness of the averments or statement made and the effect thereof. Lastly, requirements of Order XLI, Rule 27 are not satisfied. The application is dismissed. On 28th February, 2011 while admitting the present appeal under Section 260A of the Income Tax Act, 1961 (Act, for short) in the case of Mira Kulkarni, the appellant, the following substantial question of law was framed: Whether the Tribunal was correct in law and on facts in holding that expenses incurred by the appellant wholly and exclusively for the purposes of the hotel business and allowable under section 37(1) of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Tribunal, dated 30th June, 2009. 8. Learned counsel for the appellant submits that the property jointly owned by the appellant is about 1 acres and a small portion thereof is subject matter of the agreement dated 1st April, 1999. He submits that the appellant is required to maintain and carry out repair and maintenance of the property in order to ensure that the agreement dated 1st April, 1999 is adhered to and business income accrues and is enjoyed. He has drawn our attention to Annexure-A, which is the site plan annexed to the agreement dated 1st April, 1999. It is stated that the appellant had carried out repairs of the staircase in the property leading to the banks of the river Ganges and the expenditure incurred was business expenditure and, therefore, was rightly allowed by the CIT (Appeals). It is further submitted that the maintenance of the staircase was not the responsibility and was not undertaken by the second party, i.e., Neemrana Hotels Pvt. Limited, to the agreement dated 1st April, 1999. 9. Section 37(1) of the Act reads as follows:- (1) Any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Party of the Second Part in consultation with The party of the First Part may renovate and/or alter and/or modernize at its cost any section or areas of the said hotel, However, if such a renovation involves structural alterations to the building then The Party of the Second Part shall seek the written consent of The Party of the First part . Any expenditure incurred by The Party of the Second Part for renovation and/or alteration and/or upgradation and/or modernization of the said hotel and any moveable assets created during the currency of this agreement be the property of and belong to The Party of the Second Part . If the assets so created be immovable property/assets or any alteration to them, in that event at the expiry or termination of the agreement they shall become the property of The Party of the First Part . If the assets so created, be moveable assets then in that event these shall belong at all times to The Party of the Second part and on the expiry/termination of the agreement The Party of the Second Part shall have the right to remove the same subject to the prior right of The Party of the First Part to purchase the same at a mutually agreed price, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel for the appellant, however, relied upon clause 17.1, which reads as under: 17. MATTERS NOT PROVIDED IN THE AGREEMENT 17.1 If any doubt arises as to the interpretation of the provisions of this agreement or as to matters not provided therein, the parties to this agreement shall consult with each other for each instance and. resolve such doubts in good faith. 13. During the course of assessment proceedings, the Assessing Officer had written a letter to the second party, namely, M/s Neemrana Hotels Private Limited to examine the question whether expenditure of Rs.4,83,221/-, was incurred wholly and exclusively for purpose of business and to find out why the said expenditure was incurred. M/s Neemrana Hotels Private Limited in their reply stated that as per the agreement, they were liable to carry out repair and maintenance of the property used for the hotel. They had further stated that the property was jointly used by both parties as per the enclosed map and open spaces were used by the appellant to grow agricultural produce. A double storeyed structure was under the appellant s occupation for her residence and office. It was further stated that no new con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear and categorical. In case the appellant wanted to take a contrary stand and explain the said reply, it could have obtained necessary clarification from M/s Neemrana Hotels Private Limited and filed it before the authorities. M/s Neemrana Hotels Private Limited is the business partner of the appellant. Therefore, we do not think the aforesaid conclusion arrived at by the tribunal is perverse or which requires interference by this Court in an appeal under Section 260A of the Act. Foreign travel and Salary etc. 16. With regard to the foreign air travel, again the findings recorded by the tribunal are findings of fact. It was noticed that the assessee had travelled to Paris and London on a personal visit and it has been held that the expenditure was not business expense. We do not find any reason to interfere with the said finding. We may note that as per the agreement, marketing, advertisement and reservations etc. were to be undertaken by and was the responsibility of Neemrana Hotels Private Limited. There is no evidence or material placed on record as to how the said expense was connected with or for the purpose of business income. The last expense claimed is on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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