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TMI Blog2013 (1) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... and "allowances paid to the employees" similarly and does not treat them distinctly. Therefore, the contention of the assessee that daily allowances paid to the employees under section 37(3A) to (3D) should be treated separately as distinct from payments to hotels, cannot be accepted. Therefore, the Tribunal was correct in treating the daily allowance paid to employees of the assessee as having the same character as hotel expenses for the purpose of disallowance under section 37(3A) to (3D) - against assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... daily allowance paid to employees has to be meted out a separate treatment as distinct from payments to hotels on the ground that such daily allowances paid to the employees were meant to take care of their traveling expenses on tour including boarding and lodging. Therefore he confirmed the assessing officer's treatment of "daily allowances" as falling in the same category as "payments to hotels". Aggrieved by the later portion of the order of CIT (Appeals), as mentioned above, the assessee filed ITA No.687/Hyd/91 to the Income Tax Appellate Tribunal, Hyderabad A Bench, Hyderabad. By order dated 13.10.1995, the said appeal was dismissed holding that the CIT(Appeals) was right in treating such daily allowances paid to the employees as sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een treated separately from hotel expenses and disallowed under section 37(3A) to (3D) of the Act. Sri S.R. Ashok, learned Senior Counsel appearing supports the decision of the CIT (Appeals) and of the ITAT and contends that they have rightly treated daily allowances paid to the employees as similar to hotel expenses. We have considered the respective submissions. The subject assessment year is 1985-86 corresponding to the previous year 1984-85. With effect from 1.4.1984, the Finance Act, 1983 introduced sub sections (3A) to (3D) to Section 37 of the Act2. Thus, at the relevant time, the provision read as follows: "Section 37 : General: (1) Any expenditure (not being expenditure of the nature described in sections 30 to 36 and section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... motor cars shall include - (i) expenditure incurred on chartering any aircraft and expenditure on hire charges for engaging cars plied for hire; (ii) conveyance allowance paid to employees and, where the assessee is a company, conveyance allowance paid to its directors also. (3C) Nothing contained in sub-section (3A) shall apply in respect of expenditure incurred by an assessee, being a domestic company as defined in clause (2) of section 80B, or a person ( other than a company) who is resident in India in respect of expenditure incurred wholly and exclusively on - (i) advertisement, publicity and sales promotion outside India in respect of the goods, services or facilities which the assessee deals in or provides in the course of his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g by an employee or any other person within India outside the headquarters of such employee or other person for the purposes of the business or profession of the assessee shall not exceed the aggregate of the amounts computed as hereunder: (a) in respect of travel by rail, road, waterway or air, the expenditure actually incurred; (b) in respect of any other expenditure (including hotel expenses or allowances paid ) in connection with such travel, an amount calculated at the following rates for the period spent outside such headquarters; (i) in respect of an employee whose salary is Rs.1,000 per month or more Rs.100 per day or part thereof; (ii) in respect of any other employee Rs.50 per day or part thereof; (iii) in respect of any othe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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