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TMI Blog2017 (8) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... ttendance and efficiency to the workers, it is deductible under Section 37 of the Act. Stock of incentive sugar has to be valued on the levy price and not the cost price. Commissioner of Income Tax Vs. Bannari Amman Sugars Ltd. [2012 (9) TMI 848 - SUPREME COURT] Disallowance of guest house expenses under Section 37 - Held that:- In view of subsection (4) of section 37 of the Act which stood ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in deleting the disallowance, in respect of production incentive bonus amounting to ₹ 8,13,316? 2. Whether on the facts land in the circumstances of the case, the Tribunal is justified in deleting the disallowance of guest house expenses in view of the provisions of Section 37(4) of the Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in allowing deduction in respect of the incentive bonus in the present case. Question No. 3 has been answered by the Supreme Court in the case of Commissioner of Income Tax Vs. Bannari Amman Sugars Ltd. [2012] 349 ITR 708 (SC). It has been held that the stock of incentive sugar has to be valued on the levy price and not the cost price. In view of the above, the deletion allowed by the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section (4) of Section 37 of the Act as it existed reads as under:- 67 (4) Notwithstanding anything contained in sub-section (1) or sub-section (3),- (i) no allowance shall be made in respect of any expenditure incurred by the assessee after the 28th day of February, 1970, on the maintenance of any residential accommodation in the nature of a guest-house (such residential accommodation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is available under Section 37 in respect thereof. The Tribunal has not considered the effect of subsection (4) of Section 37 while confirming the allowance of the guest house expenditure. In view of the above, we answer the question no. 2 in favour of the department and against the assessee and holds that any expenditure incurred by the assessee in respect of guest house after 28.02.1970 sha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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