9911796707
TMI Blog1994 (9) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the assessment year 1977-78 : " 1. (a) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that Sterling Apartment Flat, Cottage at Marve Malad and Jindal House could not be treated as guest houses and, as such, the expenses incurred thereupon were allowable ? (b) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that only 1/3rd portion of Maharani Bagh house was a guest house and remaining portion was for business purposes ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the premium of personal accide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal was right in holding that 25 per cent. of expenses incurred under the head ' Boarding expenses ' should be considered towards employees and should be allowed accordingly ? " Briefly stated, the material facts relevant to the controversy involved in question No. 1(a) are that the assessee incurred certain expenses for the maintenance of : (i) Flat in Sterling Apartments in Bombay, (ii) Cottage at Marve Malad, Bombay, and (iii) Jindal House at Calcutta. During the course of assessment proceedings, the Income-tax Officer took the view that these residential accommodations were in the nature of guest houses and, therefore, the expenses incurred on their maintenance were disallowable under section 37(4) of the Act, which prohibits all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been called for, we are of the view that the question involving the same controversy in the present assessment year also is fit for reference. As regards the expenses incurred on the maintenance of cottage at Marve Malad, Bombay, and Jindal House, Calcutta, it is the admitted position that right from the assessment years 1972-73 to 1976-77, the Tribunal has consistently been accepting the assessee's view point and in respect of all these years the Revenue has either not sought a reference on this issue or the same has been declined by the High Court. Faced with the situation, learned counsel for the Revenue submits that each assessment year being independent, the rule of res judicata does not apply to taxation proceedings and, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a hired accommodation at A-1, Maharani Bagh, New Delhi, on the ground that the said accommodation was also in the nature of a guest house. Dealing with the issue, the Tribunal has observed that even though the affidavits were filed by the assessee in support of its claim that the building was used for holding business meetings and as a transit house, its user as a guest house could not altogether be ruled out. The Tribunal has accordingly estimated that one-third portion of the said building was used as a guest house and the remaining portion for the purposes of the business of the assessee. This conclusion of the Tribunal is a pure finding of fact which has not been challenged in the proposed question as being perverse, which finding of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Ltd. (No. 1) [1991] 189 ITR 344 (All) ), in our opinion, a reference on the question posed has to be called for. Coming to question No. 4, the claim of the assessee for investment allowance under-section 32A of the Act was disallowed by the Assessing Officer on three grounds, viz., (i) the plant and machinery on which the investment allowance had been claimed was not covered by item No. 27 of the Ninth Schedule, (ii) no evidence was adduced to show that the machinery in question was new, and (iii) no evidence was adduced to prove that the machinery was actually installed or first put to use during the relevant previous year. The Commissioner of Income-tax (Appeals) though he held that the assessee was producing " organic heavy chemicals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wned and installed and used by the assessee during the assessment year 1976-77 is established. " It is evident from the above extracted portion of the Tribunal's order that it has failed to address itself to the question as to whether the machinery on which investment allowance had been claimed by the assessee was new machinery, which is one of the essential conditions for allowance of such a relief. In this view of the matter, we are of the opinion that the proposed question is a question of law requiring consideration by this court. With regard to question No. 5, it could not be disputed by learned counsel for the assessee that identical facts involving the controversy contained in the question came up for consideration of this court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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