TMI Blog2013 (2) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the case of CIT v. Hero Cycles Pvt. Ltd. & Ors [ 1997 (8) TMI 6 - SUPREME COURT]. Disallowance under Section 37 (4) - expenditure on lease rent, taxes and repairs and maintenance of a guest house as these expenditure was allowable under certain other provisions of the Income Tax Act - Held that:- Against the assessee by virtue of the Supreme Court decision in the case of Britannia Industries Ltd. v. CIT & Anr. [2005 (10) TMI 30 - SUPREME COURT]. Claim for deduction being reserves for export market development allowance allowed - Held that:- When an amendment was introduced in Rule 5(a) of the First Schedule to the said Act amending the phrase “including any amount debited to the profit and loss account either by way of a provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 116/1998 and ITR 117/1998, which pertain to the assessment years 1980- 81 and 1981-82. In ITR 113/1998, which is the assessee s reference, the following questions have been referred to this Court for consideration:- (I) Whether on the facts and circumstances of the case and a true interpretation of Section 44 of the Income Tax Act, 1961 read with Rule 5 of the First Schedule to the said Act, the Tribunal was right in confirming the addition of Rs. 85,55,077/- representing tax deducted at source to the balance of profits disclosed by the annual accounts of the appellant insurance company? (II) Whether on the facts and circumstances of the case and a true interpretation of Section 44 of the Income Tax Act, 1961 read with Rule 5 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... velopment allowance and bad/ doubtful debt is allowable under the Income Tax Act, 1961? 5. In ITR 116/1998, the following question has been referred to us:- (V) Whether on the facts and circumstances of the case, the ITAT is right in law in holding the disallowance of Rs. 57,047/- made under Section 37 (4) of the Income Tax Act on account of expenditure on lease rent, taxes and repairs and maintenance of a guest house, on the ground that this expenditure was allowable under certain other provisions of the Income Tax Act? 6. Insofar as ITR 117/1998 is concerned, the question in this reference is identical to question No. IV above except that the amounts are Rs. 1,16,14,440/- and Rs. 3,94,916/-. ITR 115/1998 pertains to the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s regards the reserves for export market development allowance, there was some controversy before us inasmuch as according to the learned counsel for the assessee, this aspect also stood covered by the very same decision i.e., CIT v. Oriental Fire and General Insurance Co. Ltd (supra) because the reserves for export market development allowance stood in an identical position as the reserves for bad / doubtful debts and since the question of bad/ doubtful debts has been decided by the Supreme Court in CIT v. Oriental Fire and General Insurance Co. Ltd (supra), the same decision would apply to reserves for export market development allowance. However, the learned counsel for the revenue sought to bring about a distinction in the two elements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y for adjustment by reference to Rule 5(a) of the First Schedule would not arise at all. 13. Mr Syali, the learned senior counsel appearing on behalf of the assessee, submitted that the very first test is not satisfied in the present case inasmuch as the export market development allowance is actually a reserve and it has been shown as such in the accounts of the assessee. He further states that it is also so treated in the statement of the case which has been prepared by the Tribunal, while referring the said question to this Court. 14. Mr Sabharwal, however, contended that it was not a reserve but an allowance. However, ongoing through the balance-sheet, we find that the export market development allowance has been shown as a reserve. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed:- including any amount debited to the profit and loss account either by way of a provision for any tax, dividend, reserve or any other provisions as may be prescribed. In the present case, since the relevant assessment years are all prior to 01.04.1989, this additional phrase would not apply. Even the Supreme Court decision in General Insurance Corporation of India (supra) was in respect of the assessment years 1977-78 when this phrase was not there in the statute book. 16. Consequently, this aspect of the matter pertaining to reserves for export market development allowance would also have to be decided in favour of the assessee and against the revenue. It is so decided. All the questions stand answered. The references stand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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