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TMI Blog1998 (7) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure of the export division which was operated as a completely separate department and for which there were separate accounts ? (2) In the facts and circumstances of the case was the Income-tax Appellate Tribunal right in holding that the limits of daily allowance specified in rule 6D is not restricted to the time spent on actual travelling ? (3) In the facts and circumstances of the case, was the Income-tax Appellate Tribunal, right in holding that medical reimbursement should be taken into consideration as salary, while computing the disallowance to be made under section 40(c)/40A(5) of the Income-tax Act ?" Counsel submitted that similar questions had been referred to this court in respect of two earlier assessment years 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re in connection with, travelling, etc.--(1)(i) The allowance in respect of expenditure incurred by an assessee in connection with travelling by an employee or any other person outside India for the purposes of the business or profession of the assessee shall not exceed the amount which bears to the aggregate of the amount, if any, covered by foreign exchange granted, or permitted to be acquired, for the purpose of such travel under the law relating to foreign exchange for the time being in force and the amount expended on such travel in Indian currency, the same proportion as is determined in the manner specified in clause (ii) ; (ii) The proportion referred to in clause (i) shall be determined by dividing the number of days mainly devot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture does not exceed Rs. 1,500 per day, the whole of such amount ; (ii) in any other case, Rs. 1,500 as increased by a sum equal to seventy-five per cent. of such expenditure in excess of Rs. 1,500 per day." It is the case of the assessee that the limit specified therein is restricted to the amount actually spent on travelling and would not include the stay of the person who had travelled at the destination or en route, and that the limits specified in rule 6D of the Rules would not apply to the expenditure incurred during the period of stay. We do not find it possible to accept the submission. Section 37(3) of the Act itself provides that expenditure incurred on travelling by an employee or any other person (including hotel expenses o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... though the comforts available by various modes of travel have now improved to such an extent that they can almost be equated to the comforts available in a luxury hotel. That however, does not lead to the conclusion that a person is deemed to be staying in a hotel even while he is travelling or that he is deemed to be travelling even he is in hotel, using the word travel in narrow sense. That word has been used in a wider sense in the statutory provisions. As noticed already travelling for the purpose of these provisions includes the entire period of absence after the travel commences. It includes the periods spent on actual travel as also the periods spent while staying away from the headquarters before completing the route which brings t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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