9911796707
TMI Blog1996 (6) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... ors' bungalow and its furniture when the same expenses clearly come within the mischief of sub-section (5) of section 37 of the Income-tax Act, 1961 ? (ii) Whether the Tribunal did not err in facts as well as in law in applying the ratio of the decision of CIT v. Parshva Properties Ltd. [1987] 164 ITR 673 (Cal), when that decision was rendered in respect of the relevant provisions of section 37(4), before the insertion of sub-section (5) of section 37 ? " The assessee is a tea company carrying on business of tea plantation, manufacture and sale of tea. It owns a tea estate. In the tea estate, there is a bungalow for directors. In the assessment year 1985-86, certain amounts, viz., Rs. 27,760 and Rs. 21,524, were spent towards the cost o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention to section 37(4) of the Act, Mr. Joshi submits that as per section 37(4) 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. Drawing our attention to section 37(5) of the Act, Mr. Joshi emphatically submits that the nature and not the name of a house is relevant. Merely for calling a house to be director's bungalow the company shall not be entitled to allowance of deduction. Therefore, the Tribunal erred in holding that the expenditure should be allowed to be deducted from the income. Mr. Borthakur, on the other hand, submits that the Tribunal was justified under the facts and circumstances of the case in allowin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal has come to a categorical finding that it was not a guest house. It is a well-established principle of law that the finding arrived at by the Tribunal is final so far the facts are concerned unless it is perverse or while arriving at the finding the Tribunal takes up irrelevant and extraneous matters into consideration. In that case the question has to be referred under section 256(1) of the Act in that manner and only then the High Court can answer it. As the Revenue has not raised the question of perversity we are constrained to hold that it was not a guest house. In that view of the matter, if it was not a guest house definitely the expenditure should be allowed to be deducted. The Tribunal followed the decision in CIT v. P ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
