TMI Blog1989 (3) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... directing the ITO to requantify the disallowance under second proviso to Rule 6D(2) of the IT Rules. " 3. The assessee has reimbursed a sum of Rs. 1,09,178 in the assessment year 1982-83, Rs. 83,633 in assessment year 1983-84 and Rs. 47,538 in assessment year 1984-85 to its associate concern, M/s. Automotive Corporation Services Limited. This was in connection with common facilities like, office premises, consultancy, transit home and telex and telephone facilities. The ITO, applying the provisions of sec. 37(4) read with sub-sec. (5) disallowed the claim of the assessee as in the last year. The CIT(A), following his order in the appeal for 1981-82, directed the ITO to requantify the amount to be disallowed in respect of the transit flat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar has misdirected himself in observing that there was no serious dispute that the expenditure reimbursed by the assessee would be in the nature of expenditure on the maintenance of the guest house. He submitted that sharing of the expenditure is on the basis of the trip of the employee and the charges are on the basis of a fixed rate of Rs. 150 per employee. There is no reservation as such of any room in the accommodation maintained by M/s. Automotive Corporation Services Limited. The assessee had no right or priority to occupation of the premises. It was made available to the employees of the assessee only in a case where the room was vacant. The expenses according to him were not on the maintenance of the guest house or a premises in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for the maintenance of the transit home by Automotive Corporation Services Ltd. are shared on the basis of the number of employees who visited the transit home during the year under consideration. These expenses were not for the occupation of the rooms as such and in these circumstances, it cannot be said that the transit home at Delhi was hired by the assessee. As stated by the learned counsel for the assessee, no particular room or number of rooms are reserved for the assessee and an employee of the assessee was provided a room to stay only in case of vacancy and it is difficult to hold that there was any reservation of any accommodation for the assessee. The words " otherwise arranged by the assessee to the employees " have to be const ..... X X X X Extracts X X X X X X X X Extracts X X X X
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