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TMI Blog2007 (9) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal was justified in law in holding that for disallowance under section 40A(5) of the Income-tax Act, 1961 : (a) Taxable part of the house rent allowance paid to the employees of the assessee be treated as salary and not the total house rent allowance paid in cash. (b) Conveyance allowance which is not exempt under section 10(14) of the Income-tax Act would only form part of the salary and not the total conveyance allowance. (c) Car perquisite should not be a determined in accordance with rule 3 of the Income-tax Rules, 1962. 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the following expenses do not qualify for weighted deduction under section 35B of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck this amount to the income of the assessee. The view expressed by the Assessing Officer was upheld in appeal by the Commissioner of Income-tax (Appeals) as well as by the Tribunal. 5. According to learned counsel for the assessee, the amounts do not represent the income of the assessee and in this regard reliance has been placed on the decision of the Supreme Court in CIT v. Sugauli Sugar Works P. Ltd. [1999] 236 ITR 518. It may be mentioned at this stage that this decision is rendered by the two learned judges of the Supreme Court. In this decision, it has been held that a mere entry in the books of account of the debtor made unilaterally without any act on the part of the creditor will not enable the debtor to say that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Supreme Court as not being relevant to the facts of the case on hand while the case of CIT v. Sugauli Sugar Works P. Ltd. [1999] 236 ITR 518 was followed. The decision of three learned judges of the Supreme Court in Chief CIT v. Kesaria Tea Co. Ltd. [2002] 254 ITR 434 pertained to a statutory liability, namely, a purchase tax liability. It was held by the Supreme Court, with reference to section 41(1) of the Act, that a unilateral action on the part of the assessee by way of writing off such purchase tax liability in its accounts does not necessarily mean that the liability ceased in the eye of law. Great emphasis was laid by learned counsel for the assessee on this conclusion of the Supreme Court. We hasten to add that the view ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n J. L. Gupta [2005] 144 Taxman 692 and we have doubts whether it can be said to have any precedential value. 12. Learned counsel for the assessee has drawn our attention to the Explanation which has been inserted in section 41(1) of the Act with effect from April 1, 1997. 13. He submits that the legislative intention behind the insertion of the said amendment was that with effect from April 1, 1997, unilateral cessation of a liability by the assessee would be treated as income. In other words, it was his contention that prior to April 1, 1997, a unilateral writing off of a liability could not be treated as an income of the assessee. 14. We are not in agreement with this contention. The position in law, which already existed, and was set ..... X X X X Extracts X X X X X X X X Extracts X X X X
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