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TMI Blog1991 (10) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... ar running and maintenance expenses at Rs. 1,61,116 and hotel expenses at Rs. 4,130. The aggregate of all these expenses amounted to Rs. 4,08,118. After allowing the statutory deduction of Rs. 1,00,000, the Assessing Officer disallowed under section 37(3A) a sum of Rs. 61,623 @ 20 per cent of Rs. 3,08,118. 4. The assessee submitted before the first appellate authority that motor-car running and maintenance expenses included repair expenses amounting to Rs. 43,635 and claimed that these expenses were not covered by section.37(3A). The learned Commissioner of Income-tax (Appeals) did not accept the contention of the assessee and upheld the action of the Assessing Officer on this point. The assessee has come up in further appeal before the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Reliance in this regard is placed on the Supreme Court decision in CWT v. Trustees of H.E.H. Nizam's Family (Remainder Wealth) Trust [1977] 108 ITR 555, Supreme Court decision in CIT v. Shahzada Nand Sons [1966] 60 ITR 392 and Calcutta High Court decision in CIT v. Chitpur Pressing Co. (P.) Ltd. [1982] 133 ITR 426. 9. Sub-section (3A) of section 37 carves out an exception out of section 37(1). According to this section though a particular expenditure may be covered by section 37(1) and hence allowable as a deduction, it may be partly disallowable as per the provisions of section 37(3A). 10. If the above scheme of the Act is grasped then there is little difficulty in resolving the controversy at hand. Section 31 stipulates that in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, therefore, do not come under the scope or ambit of section 37 at all. Since these expenses do not come under the scope of section 37(1), these cannot be considered for the purposes of section 37(3A). We, therefore, hold that current repair expenses are not to be taken into consideration for the purposes of working out the disallowance under section 37(3A). In the case of Purolator India Ltd. perhaps the matter was not projected in a proper perspective and that is why the Tribunal took a different view. We have discussed the scheme of the Act and come to a definite conclusion that expenses with regard to current repairs are not to be taken into consideration for working out the disallowance under section 37(3A). We are further supported ..... X X X X Extracts X X X X X X X X Extracts X X X X
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