TMI Blog2013 (12) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... ers - Decided in favour of Revenue. - Income Tax Appeal Defective No. 160 of 1999 - - - Dated:- 13-12-2013 - Hon'ble Sunil Ambwani And Hon'ble Surya Prakash Kesarwani,JJ. ORDER 1. We have heard Shri Shambhu Chopra, learned counsel for the Income Tax Department. Shri N.C. Gupta appears for the respondent-assessee. 2. This Income Tax Appeal under Section 260A of Income Tax Act, 1961 arises out of an order dated 4.12.1998 passed by Income Tax Appellate Tribunal, Allahabad Bench 'A', Allahabad in ITA No.323 (Alld) of 1991 for assessment year 1984-85. The appeal was admitted on the substantial question of law as follows:- "Whether the Hon'ble I.T.A.T. was correct in the interpretation of provisions of sub-section (3B) of Section 37 of I.T. Act, 1961 in view of explanation (a) appended to sub-section (3B) of Section 37 of I.T. Act, 1961?" 3. Brief facts giving rise to the Income Tax Appeal are that the assessee filed a return for a loss of Rs.4,87,530/- for the assessment year 1984-85 relevant to previous year ending on 30.6.1983 on 25.6.1984. The assessment was framed under Section 143 (3) on the income computed at Rs.90,70,506/- after giving adjustment of Rs.3051/- i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1 lakh is admissible on the aggregate of the expenses in respect of the items of expenditure mentioned in sub-section (3A) read with the Explanation (a) for the purposes of sub-sections (3A) and (3B) of Section 37. The CIT (A) rejected the application on the ground that the provisions for deduction, exemption or relief should be construed liberally and that his predecessor in the case of M/s Mitra Prakashan (P) Ltd, Allahabad in the appellate order dated 15.9.1988 for assessment year 1985-86 had taken a similar view. 8. The Deputy Commissioner of Income Tax (Asst.) filed I.T.A. No.323 (Alld) of 1991 in which an objection was taken by the assessee that since the department had not preferred an appeal against the appellate order, the application for rectification under Section 154 (2) of the Act is not maintainable. Earlier the Tribunal had dismissed the appeal in which no such ground was taken. The Tribunal rejected the objections on the ground that the issues pressed by the assessee in its appeal before the Appellate Tribunal were totally different and thus theory of merger has no application; the Tribunal is competent in law to decide the appeal on merits. On appeal the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3D) as follows:- "II. The following sub-ss. (3A) to (3D) were inserted by the Finance Act 1983 with effect from 1st April 1984 and deleted by the Finance Act, 1985 with effect from 1st April, 1986: "(3A) Notwithstanding anything contained in sub-section (1), where the expenditure or, as the case may 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 cards; 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 amount of expenditure incurred by the assessee as reduced by so much of such expenditure as is not allowed under any other provision of this Act; (b) expenditure on advertisement, pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such expenditure as is not allowed under any other provision of this Act. The Explantion (a) clarifies without admitting any doubt that the expenditure incurred on any or all the items under sub-section (3B) has to be aggregated before the deduction of twenty per cent of such excess beyond one hundred thousand rupees may be allowed in computing the income under the head 'Profits and gains of business or profession'. In Union of India vs. Hansoli Devi (2002) 7 SCC 273, the Supreme Court held that if the words of the Statute are in themselves precise and unambiguous, then no more can be necessary than to expound these words in their natural and ordinary sense. The words thesemselves alone do, in such case, best declare the intention of the law givers. 12. We agree with the contention of Shri Shambhu Chopra that there is no doubt nor could there be any debate with the plain and simple meaning of the exemption provided under Section 37 (3A) to (3D) read with Explanation (a) of the Act. 13. The CIT (A) and Tribunal have erred in interpreting the deduction under Section 37 (3A)/(3B) by reading the word 'or' after each of the clauses (i), (ii) and (iii) of sub-section (3B). The wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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