1991 (6) TMI 63

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..... irecting the Income-tax Officer to recompute the capital employed without deducting the current liabilities and redetermine the deduction admissible to the assessee under the provisions of section 80J and rule 19A of the Income-tax Rules ? (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that, except for the amount of Rs. 3,029 the balance of the expenses of Rs. 24,307 were not hit by the provisions of section 37(4) of the Income-tax Act, 1961, and, consequently, were allowable under section 37(1) of the Act ? (3) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in applying the tests laid down in the .....

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..... ITR 308. Following the said decision, question No. 1 is answered in the negative and against the assessee. So far as questions Nos. 2, 3 and 5 are concerned, they are covered by the decision of this court in CIT v. Patel Brothers and Co. Ltd. [1977] 106 ITR 424. Following the said decision, we answer questions Nos. 2, 3 and 5 in the affirmative and in favour of the assessee. Questions Nos. 6 and 7 are covered by the decision of this court in the assessee's case for the assessment year 1966-67 which is reported in [1986] 162 ITR 496 (Kaira District Co-operative Milk Producers' Union Ltd. v. CIT). Following the said decision, we answer question No. 6 in the negative and against the assessee. We may, however, make it clear that though the Inco .....

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..... ch or dinner to visitors, employees and technicians who visited the factory. The expenses other than Rs. 3,029 which were incurred for waterproofing work on the terrace are the subject-matter of questions Nos. 2, 3 and 5 which we have already answered above following the decision of this court in CIT v. Patel Brothers and Co. Ltd. [1977] 106 ITR 424. Now, so far as the expenditure of Rs. 3,029 incurred for the waterproofing work of the terrace is concerned, in our opinion, such expenditure would be covered by section 30(a)(ii) of the Act. In other words, deduction of such expenditure is allowable under the said provision. Therefore, such expenditure cannot be disallowed under the provisions of section 37(4) of the Act. similar view was take .....

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