TMI Blog1993 (1) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... owing three questions under section 256(1) of the Income-tax Act, 1961, to this court for its opinion : " 1. Whether, on the facts and in the circumstances of the case, the disallowance of the claim of the assessee to the extent of Rs. 1,49,565 was justified ? 2. Whether the rejection of the claim of the assessee for depreciation on Rs. 1,38,773 being the capital expenditure incurred by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim for deduction of Rs. 90,249 (Rs. 2,39,814 minus Rs. 1,49,565) was made as no provision was made in that behalf. The Income-tax Officer disallowed the claim on the ground that conditions of section 40A(7) were not satisfied. This view was confirmed by the Appellate Assistant Commissioner in appeal. In further appeal to the Tribunal, it was held that the claim of Rs. 1,49,565 should fail wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the position of law is now settled by the decision of the Supreme Court in Shree Sajjan Mills Ltd. v. CIT [1985] 156 ITR 585. In that case, it was held that for gratuity to be deductible, the conditions laid down in section 40A(7) had to be fulfilled. The deduction could not be allowed on general principles under any other section of the Act. In that case, the Supreme Court further held that, eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciation under section 32 of the Income-tax Act, 1961, and the other by way of allowance under section 35(1)(iv) of a part of the capital expenditure on scientific research, even though the two heads of deduction do not completely overlap and there is some difference in the rationale of the two deductions. In the result, question No. 1 is answered in the affirmative, i.e., against the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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