TMI Blog1988 (11) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and in the circumstances of the case, the assessee-company was entitled to the deduction of Rs. 9,156.90 ? " The assessee paid rent of Rs. 8,400 in respect of a flat in Anita Apartments, Mount Pleasant Road, Bombay. Half the flat was used for the residence of the officers of the company and the remaining half was used as its guest house. The assessee had also incurred an expenditure of Rs. 10,760 on the maintenance of the guest house as per details hereunder : Rs. 1. Expenses incurred in maintenance and provisions 4,809.83 2. Salary of cook-cum-servant 2,400.00 3. Curtains for the flat 1,164.83 4. Repairing of bath rooms 782.24 5. Repairing of furniture from time to time 481.19 6. Polishing of furniture from ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Tribunal accepted the submission that the expenditure in question was allowable under sections 30 and 31 of the Act and not under section 37(1) and, therefore, the provisions of section 37(3) were not applicable. Taking us through the provisions of section 37(3) of the Income-tax Act, Shri Jetley, learned counsel for the Department, reiterated that section 37(3) was in reality a substantive provision, which had an overriding effect on all the provisions in the Act pertaining to allowance of expenditure in computing the income from business and profession. It was stated that the provisions contained in section 37(3) specifically covered all kinds of expenses incurred in connection with the guest house maintained by an assessee for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble under section 30 and expenditure relating to the repairs and polishing of furniture falling under section 31 could not again fall for consideration under this sub-section. Coming then to the provisions of sub-section (3) of section 37, it is seen that the provisions in that sub-section start with a non obstante clause "Notwithstanding anything contained in sub-section (1) . . ." which of necessity must relate to expenditure allowable under sub-section (1) of section 37 of the Act and no other provision. This being so and the assessee's case, as stated by us above, not falling to be considered under section 37(1) of the Act, we are in agreement with the view taken by the Tribunal that the deduction in respect of rent for the guest hou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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