1993 (5) TMI 12 - HC - Income Tax

Summary

Issues involved: Interpretation of law regarding disallowance under section 37(3A) of the Income-tax Act, 1961 for the assessment year 1985-86.

Judgment Summary:

Issue 1: Disallowance under section 37(3A) of the Income-tax Act
The Assessing Officer initially excluded Rs. 2,56,286 for repairs of motor cars from motor car expenses in calculating the disallowance under section 37(3A) amounting to Rs. 64,688. The Commissioner of Income-tax (Appeals) then enhanced the disallowance under section 37(3A) and directed the Assessing Officer to modify the assessment including the Rs. 2,56,286. The Tribunal, citing judicial pronouncements and the decision of the Bombay High Court, held that expenses covered by sections 30 and 31 could not be disallowed under section 37(3A). The High Court, referring to a previous decision, upheld the Tribunal's decision in favor of the assessee.

Conclusion:
The High Court answered the question in the reference in the affirmative and in favor of the assessee, following a previous decision. No costs were awarded in this matter.