TMI Blog1995 (8) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal. The Tribunal upheld the order of the first appellate authority, viz., the Appellate Assistant Commissioner. The assessee claimed a sum of Rs. 49,463 being the expenditure incurred on the maintenance of guest-house. The Tribunal, having regard to the order passed in appeal in respect of the very same assessee for earlier assessment years, recorded a finding that the maintenance expenses do not relate to the guest-house. In regard to the other expenditure incurred by the assessee on the travelling of the employees, the question was how much quantum of expenditure is allowable having regard to the provisions of rule 6D(2) of the Income-tax Rules, 1962 (hereinafter referred to as "the Rules"). The Income-tax Officer in computing the permissibility of the expenditure took each trip made by the employee of the assessee as against the claim of the assessee that the total expenditure incurred by each employee in one year should be taken into consideration. The assessee carried the matter in appeal before the Appellate Assistant Commissioner, who, having agreed with the Income-tax Officer, dismissed the appeal. On further appeal to the Tribunal, it was held that the question of all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the provision of any perquisite (whether convertible into money or not) to an employee or incurs directly or indirectly any expenditure or is entitled to any allowance in respect of any assets of the assessee used by an employee either wholly or partly for his own purposes or benefit, then, subject to the Provisions of clause (b), so much of such expenditure or allowance as is in excess of the limit specified in respect thereof in clause (c) shall not be allowed as a deduction : Provided that where the assessee is a company, so much of the aggregate of--- (a) the expenditure and allowance referred to in sub-clauses (i) and (ii) of this clause ; and (b) the expenditure and allowance referred to in sub-clauses (i) and (ii) of clause (c) of section 40, in respect of an employee or a former employee, being a director or a person who has a substantial interest in the company or a relative of the director or of such person, as is in excess of the sum of one hundred and two thousand rupees, shall in no case be allowed as a deduction : Provided further that....." A plain reading of the provisions of section 40A(5)(a)(ii) of the Act indicates that any expenditure incurred b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. [1991] 192 ITR 245 and the Delhi High Court in CIT v. Shriram Refrigeration Industries Ltd. [1992] 197 ITR 431. No contrary decisions are brought to our notice. Therefore, we answer the first question in the negative, i.e., in favour of the assessee and against the Revenue. Question No. 2 : The question as framed has a very limited scope. We are told that the provision of law is wrongly referred to as section 37(3) and that it should be 37(4). Be that as it may. Our scrutiny to answer this question, is limited to finding out as to whether there is any material on which the Tribunal could have reasonably held that the building in question is not guest-house within the meaning of the said provision. A perusal of the order of the Tribunal shows that in respect of the very same building, the same question arose in the assessment years 1971-72 and 1972-73 in Income-tax Appeals Nos. 2077 and 2078 of 1976-77. Having gone through the material placed before the Tribunal, it recorded the finding that the accommodation maintained by the assessee was used only by the executives of the assessee-company as a transit accommodation who were visiting Hyderabad on company's business and as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in respect of expenditure incurred by an assessee in connection with travelling by an employee or any other person within India outside the headquarters of such employee or other person for the purposes of the business or profession of the assessee shall not exceed the aggregate of the amounts computed as hereunder : (a) in respect of travel by rail, road, waterway or air, the expenditure actually incurred ; (b) in respect of any other expenditure (including hotel expenses or allowances paid) in connection with such travel, an amount calculated at the following rates for the period spent outside such headquarters : (i) where the amount of such expenditure does not exceed Rs. 1,500 per day, the whole of such amount ; (ii) in any other case, Rs. 1,500 as increased by a sum equal to seventy-five per cent. of such expenditure in excess of Rs. 1,500 per day. " Clause (b) of sub-rule (2) is a relevant provision with which we are concerned. A careful reading of the said provision shows that while computing the expenditure under sub-section (3) of section 37 of the Act, subject of course to the limitations imposed therein, the amount has to be calculated with reference to each ..... X X X X Extracts X X X X X X X X Extracts X X X X
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