TMI Blog1999 (9) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... loyees would be hit by the provisions of section 37(3A) of the Act and accordingly was liable to be computed for computation of disallowance?" So far as the interest on sticky loans is concerned, in UCO Bank v. CIT [1999] 237 ITR 889, it was observed by the apex court as under: "Looking to the method of accounting so adopted by the assessee in such cases, the circulars which have been issued are consistent with the provisions of section 145 and are meant to ensure that assessees of the kind specified who have to account for all such amounts of interest on doubtful loans are uniformly given the benefit under the circular and such interest amounts are not included in the income of the assessee until actually received if the conditions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (c) to section 37(3A) includes within the field, expenditure on running and maintenance of air-crafts and motor cars and that the said Explanation does not exclude conveyance allowance paid by the employer. The Tribunal further held that the scope of running and maintenance of motor car had been widened to extend to all sorts of conveyance allowance paid to the employees and the introduction of Explanation (c) is plain and simple and does not warrant any ambiguity. The Tribunal accordingly allowed the appeal filed by the Revenue. Section 37(3A) reads as under: "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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conveyance allowance cannot be considered for the purpose of disallowance as the payment has been made for maintaining the scooters and two wheelers, which cannot be considered as motor car. The Tribunal was of the view that it is the payment of conveyance allowance paid to the employees which shall be considered as an expenditure for running and maintaining a motor car. Explanation (c) to section 37(3B) includes the expenditure incurred on hire charges for engaging cars plied for hire. But that is not the case here. Besides that, the conveyance allowance paid to the employees has been treated as expenditure on running and maintenance of motor car. From the perusal of section 37(3B) it is evident that if the expenditure is incurred by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
