TMI Blog1983 (2) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee during the previous year under consideration was not justified. The ITO scrutinised the travelling expenses incurred by the assessee, and found that out of seventeen tours in all, there were excess payments in respect of eight tours; excess, in relation to the amounts laid down under rule 6D of the Income-tax Rules, 1962, read with section 37(3), of the Income-tax Act, 1961 ('the Act'). The amounts spent on these eight tours by the assessee came to Rs. 7,458. The ITO calculated the amount allowable under rule 6D in respect of these eight tours to be only Rs. 2,000. He, therefore, allowed a sum of Rs. 2,000 and disallowed the balance of Rs. 5,458 while computing the assessee's income from profession. 3. The assessee appealed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y other person' are those who were not employees of the assessee like his agents, legal advisors or some other persons doing casual work for the assessee. His point was that the assessee himself would not come under the phrase 'employees' or 'any other person' appearing in section 37(3). Hence, he urged that the revenue authorities erred in disallowing a portion of the travelling expenses incurred by the assessee himself by invoking section 37(3), when the said provisions were not at all applicable to the facts of this case. In support of his contention, he drew our attention to sub-clause (iii) of rule 6D(2)(b) for the proposition that the assessee himself is excluded under section 37(3). 5. Without prejudice to the above, Shri Kamdar ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord 'assessee' was not stated in section 37(3) was, according to him, that all assessees who are not natural persons could not travel. For example, a company or a firm or a HUF cannot travel, but expenses on travelling incurred by anybody on their behalf would be hit by section 37(3). He stated that the provision of section 37(3) has to be understood in the context in which it appears having regard to the scheme of the Act. In particular, he pointed out that this section has been enacted in order to avoid tax evasion by debiting excessive travelling expenses to the business carried on by the assessee. In that context, be argued that it is immaterial if the expenses were incurred either by the assessee or by anybody else so long as they are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etor is excluded from its purview. We are not impressed with the argument raised for the assessee that 'any other person' must be an employee or an agent but should not be an assessee. The context in which section 37(3) appears and the general scheme of the Act points to the fact that this provision has been enacted to prevent excessive travelling expenses being debited to the business carried on by the assessee, thereby reducing the legitimate tax payable by the assessee. In our opinion, the words 'any other person' have been used in contradistinction to the word 'employee' preceding them and so anybody who is not an employee will come under 'any other person'. Considering the context of the section and the general scheme of the Act, we ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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