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TMI Blog2001 (8) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... e dispute relates to the assessment year 1976-77. The assessee, a public limited company, claimed that no disallowance under rule 6D of the Income-tax Rules, 1962 (in short, "the Rules"), was required to be made. The stand of the assessee was that boarding and lodging expenses and daily allowance paid to an employee after he reached his destination should not be taken into consideration for the purpose of applying the limits prescribed under rule 6D. The figure of such expenditure was undisputedly Rs.1,22,677. The Income-tax Officer did not accept the assessee's submission and in the draft assessment order in terms of section 144B of the Act proposed a disallowance of Rs.1,22,677. The assessee's objections were duly noted and the Inspecting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Any expenditure (not being expenditure of the nature described in sections 30 to 36 and section 80VV and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head 'Profits and gains of business or profession'. Explanation.--For the removal of doubts, it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure ... " Section 37 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, the number of days required for such travel by a reasonably direct route in the mode of travel adopted by him). Explanation.-For the purpose of this rule, the expression 'days mainly devoted by such employee or other person for the purposes of the business or profession of the assessee outside India' shall include any public holiday in a foreign country on which such employee or other person is required to stay outside India, provided that the working day immediately following such public holiday is mainly devoted by him for the purposes of the business or profession of the assessee. (2) The allowance in respect of expenditure incurred by an assessee in connection with travelling by an employee or any other person within India outsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de his headquarters, stays free of charge in a guest house maintained by the assessee, the amount under this clause shall be calculated at one-third of the aforesaid rates and where the emplovee or such other person is provided lodging only free of charge, at one-half of the aforesaid rates." In clause (a) of rule 6D(2) the actual expenditure incurred on travelling by rail, road, waterway or air, etc. is allowed. In respect of any other expenditure (including hotel expenses or allowances) paid in connection with such travel, the amount paid to the employee may be more but it is to be limited to the limits laid down in the rule. The first proviso to rule 6D(2) states that if the stay of an employee or other person outside his headquarters ..... X X X X Extracts X X X X X X X X Extracts X X X X
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