TMI Blog2006 (6) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act, 1961 as it then existed? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in deleting the disallowance of the amounts of depreciation, insurance premium, rent on furniture relating to the residential accommodation 'Niladri' on the ground that inasmuch as the expenses were not allowable specifically under section 37(1) of the Income-tax Act, the provisions of section 37(4) would not apply thereto? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that expenses relating to the building 'Niladri' at Bombay were allowable as expenses incurred for the purpose of the business of the assessee, even though it had been found out on insp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under section 40(c) of the Act. The same was not accepted both by the Assessing Officer as well as by the appellate authority. The Tribunal has accepted the same in the light of the judgment of the Calcutta High Court in India Jute Co. Ltd. v. CIT [1989] 178 ITR 649. According to the Tribunal, the said payment of commission would not fall within section 40(c) of the Act. Heard learned counsel for the parties and perused the material placed on record. At this stage, we have to notice that in somewhat similar circumstances, a Division Bench of this court in ITRC No. 136/1994, dated March 25, 1996 has chosen to consider this very issue and this court has also noticed the judgment as referred to in the order of the Tribunal. After referri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector is expected to incur such expenditure and on offering of such personal guarantee if any commission is paid, whether such amount could be treated as remuneration paid for such activity. When it cannot be treated as a remuneration paid to the chairman and director, we do not think it would be appropriate to hold that the same should be subjected to limitations of the provision of section 40(c) of the Income-tax Act. Therefore, we answer the question referred for our opinion against the Department and in the affirmative." The said judgment is equally applicable to the facts of this case. In the light of the answer in identical circumstances by the Division Bench, we deem it proper to answer the first question in favour of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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