9911796707
TMI Blog2003 (4) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... Department has come by way of reference under section 256(1) of the Income-tax Act, 1961, in respect of the assessment years 1983-84 and 1984-85. The questions referred to us for our opinion are as follows: "Question 1: Whether the Tribunal was right in law in allowing maintenance expenses incurred by the assessee on the flat owned by it and provided to its employees?" Answer: In view of our judgment in the case of Citibank N.A. v. CIT decided on March 5, 2003, vide Income-tax Reference No 5 of 1994 ([2003] 262 ITR 47 (Bom)), we answer the above question No. 1 in the negative, i.e., in favour of the Department and against the assessee. "Question 11: Whether the Tribunal was right in law in holding that the maintenance expenses incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng for the purposes of the business of manufacture or production of any article or thing. It was argued that the assessee was in banking business. That, it was not an industrial undertaking as it was not in the business of manufacturing articles or things. He, therefore, contended that the assessee was not entitled to the benefit of deduction under section 32A of the Income-tax Act. In this connection, he placed reliance on the judgment of the Bombay High Court in the case of CIT v. R. Shroff Consultants Pvt. Ltd. [1999] 238 ITR 1018. He also relied upon a judgment of the Bombay High Court in the case of Insight Diagnostic and Oncological Research Institute P. Ltd. v. Deputy CIT decided on April 16, 2003, vide Income-tax Appeal No. 247 of 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT v. Peerless Consultancy and Services (P.) Ltd. [2001] 248 ITR 178. He also relied upon the judgment of the Madras High Court in the case of CIT v. Comp-Help Services (P.) Ltd. [2000] 246 ITR 722. He also relied upon the judgment of the Kerala High Court in the case of CIT v. Computerised Accounting and Management Service (P.) Ltd. [1999] 235 ITR 502. He contended that the computers were not appliances as computers constituted substitutes for human labour. That, appliances could be operated by even lay persons. Findings on question No. III: We find merit in the arguments advanced on behalf of the assessee on this point. It is, no doubt, true that the judgments cited on behalf of the assessee refer to the assessees whose business w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stomers does involve the work of data processing. It is on the basis of this data processing that the information is provided to its customers by the bank. It is on the basis of this data processing that the balance-sheets are prepared. It is on the basis of this data processing done by the computers that the management information reports come out. Answer: In the circumstances, we answer the above question No. III in the affirmative, i.e., in favour of the assessee and against the Department. "Question IV: Whether the Tribunal was right in law in allowing the travelling expenses of Rs. 4,20,706 incurred on the staff members of the head office on their visit to the branch office of the assessee in India Findings on question No. IV: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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