TMI Blog1983 (5) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... by the ITO allowing the claim of the assessee to deduct Guest House expenses of Rs. 21,429, Rs. 24,345 and Rs. 25,386 during the three years under consideration. Subsequently, the ITO came to hold the view that in view of the decision of the Tribunal relating to the asst. yrs. 1970-71 and 1971-72, the aforesaid expenses relating to the Guest House were not admissible deductions. Hence, he passed the orders u/s 154 of the Act on 30th March, 1979 withdrawing the allowance of the aforesaid amounts during the three years under consideration. 3. The assessee appealed to the CIT (A), and contended that the action of the ITO was not justified. It was pointed out that the Tribunal did hold that the accommodation was in the nature of Guest House ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Sugars Ltd., the accommodation under consideration could not be considered to be in the nature of Guest House. Hence, he cancelled the orders u/s 154 of the Act passed by the ITO for the three years under consideration. 4. Shri G. Krishnan, the ld. representative for the department, urged before us that the ld. CIT(A) erred in his decision. He stated that when the ITO passed the orders u/s 154 of the Act, the decision of the Madras High Court in the case of Aruna Sugars Ltd. was not available to him. Hence in view of the earlier decision of the Tribunal in the case of the assessee, the ITO did find mistakes in the original assessment orders and so, he rectified the same. According to him CIT(A) should have confirmed the rectification o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs but also by the employees and staff of the assessee-company. The assessee's claim that the outsiders were not total strangers, but in some way or other connected with the business carried on by the assessee has not been controverted. Hence, we agree with the ld. representative for the assessee that the accommodation under consideration could not be regarded as Guest House for the purpose of s. 37 of the Act, on the authority of the decision of the Madras High Court in the case of Aruna Sugars Ltd. We find that the ITO has ignored the subsequent order dt. 18th December, 1975 of the Tribunal, which materially altered the earlier order of the Tribunal. Hence the original assessment orders might not be said to be erroneous. Be that as it may ..... X X X X Extracts X X X X X X X X Extracts X X X X
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