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TMI Blog2013 (2) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... e expenditure incurred for hiring space at various locations, shall be considered for the purposes of computation of disallowance under section 37(3A) of the Income-tax Act, 1961, despite the fact that rentals are allowance under section 30 of the Act ? Assessment year 1986-87 Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that excise duty is a direct cost of manufacture even after recording a finding of fact that the moment goods are produced the levy is fastened ? 2. The second question has to be answered in favour of the Revenue and against the assessee in view of the decision of this court in a case of the assessee itself in R. C. No. 33 of 1995, dated June 9, 2006 (Bakelite Hylam Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals) disallowed the claim holding that it would not come under section 37(3A) read with sub-section (3B)(i). This view was confirmed by the Income-tax Appellate Tribunal as well, aggrieved by which the assessee sought reference of the second question as noticed hereinabove. 4. We have heard the counsel for the assessee and the junior standing counsel for Income-tax Department. 5. Hereinbelow, we quote sections 30 and 37 of the Act to the extent necessary as they existed at the relevant time in the Act. "30. Rent, rates, taxes, repairs and insurance for buildings.-In respect of rent, rates, taxes, repairs and insurance for premises, used for the purposes of the business or profession, the following deduc-tion shall be allowed- &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be, the aggregate expenditure incurred by an assessee on any one or more of the items specified in sub-section (3B) exceeds one hundred thousand rupees, twenty per cent. of such excess shall not be allowed as deduction in computing the income chargeable under the head 'Profits and gains of business or profession'. (3B). The expenditure referred to in sub-section (3A) is that incurred on- (i) advertisement, publicity and sales promotion ; or (ii) running and maintenance of aircraft and motor cars ; or (iii) payments made to hotels. Explanation.-For the purposes of sub-sections (3A) and (3B),- (a) the expenditure specified in clause (i) to clause (iii) of sub-section (3B) shall be the aggregate amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emises for the purpose of business or profession". By no stretch of imagination, it can be inferred that the hire charges paid for advertisement hoardings would also come within the ambit of use of the premises for the purpose of business. Section 30 has nothing to do with advertisement, publicity or sales pro-motion. Giving very plain meaning of the language in section 30, it has to be construed as dealing with the deduction of rent, rates, taxes, repairs and insurance paid for the premises used for the business or profession either as a tenant or otherwise as a tenant. It does not take within its fold expenditure incurred for advertisement or publicity. If section 30 is inter-preted as also allowing deduction of the hire charges for the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Rowlatt J. expressing the principle in the following words : 'In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used'. Relying upon this passage Lord Upjohn said : 'Fiscal measures are not built upon any theory of taxation'." 8. The above passage was quoted with approval in CIT v. Kasturi and Sons Ltd. [1999] 237 ITR 24 (SC) ; [1999] 3 SCC 346 ; AIR 1999 SC 1275. In State of West Bengal v. Kesoram Industries Ltd. [2004] 266 ITR 721 (SC) ; [2004] 10 SCC 201, citing the same, the apex court summed up the following settled princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or profession". Sub-sections (3A) and (3B) are attracted in respect of the expenditure incurred by an assessee either on advertise-ment or publicity or sales promotion. It does not in any manner deal with the expenditure for hiring space on hoardings. 10. As noticed by the Commissioner of Income-tax (Appeals), the expendi-ture under the head expenditure incurred on hired space in a sum of Rs.2,80,259 does not come within the purview of publicity, advertisement or sales promotion. Section 37(3A) read with sub-section (3B) is very speci-fic that it is only the expenditure incurred for advertisement, publicity and sales promotion which are to be given ordinary meaning. Mere hiring a on hoardings cannot be treated as expenditure for advertise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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