9911796707
TMI Blog1993 (2) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in treating the contribution to the Molasses Storage and Maintenance Reserve created under the Uttar Pradesh Sheera Niyatran (Sansodhan) Adesh, 1974, as a revenue expenditure ? 3. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the assesseecompany was entitled to deduction under section 80G in respect of the donation to Vishwa Mangal Trust ?" Shortly stated, the facts are that the assessment year involved is 1978-79. The assessee-company claimed deduction for expenses incurred for providing food, tea, tiffin, etc., to visitors and customers who stayed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by the assessee. Therefore, it is urged by learned counsel appearing for the Revenue that the disallowances were correctly made by the Income-tax Officer. We find that the submissions made on behalf of the Revenue have strong force. The assessment order clearly indicates that the disallowance is made by invoking sub-section (4) of section 37. The said provisions are extracted below : " (4) Notwithstanding anything contained in sub-section (1) or subsection (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 being hereafter in this sub-section r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o allowance at all is intended in respect of any expenditure incurred after February 28, 1970, on the maintenance of any residential accommodation in the nature of a guest house. No allowance of depreciation is also permissible for such guest house or any assets in such guest house. The prohibition against the allowance of maintenance expenditure of the guest house is unmitigated. The only relaxation is in respect of holiday homes meant for wholetime employees for their exclusive use while on leave ; there is no other relaxation. Where, however, the assessee collects any charge from the boarders, such charges have to reduce the amount of disallowance. This sub-section was inserted by the Finance Act, 1970, having effect from the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 977-78. This identical issue was answered by us in Income-tax Reference No. 166 of 1985 in CIT v. New India Sugar Mills Ltd. [1994] 206 ITR 212, decided on April 12, 1990. Following the said decision, we hold that the Tribunal's order is correct. The facts that raise question No. 3 are that, during the relevant year, the assessee made a donation of Rs. 2,57,000 to Vishwa Mangal Trust and claimed relief under section 80G on the said sum. But the Income-tax Officer did not allow the relief on such donation on the ground that the said trust did not satisfy the condition to qualify for deduction under section 80G. The Commissioner of Income-tax (Appeals), however, allowed the relief as claimed by the assessee. On the Revenue's appeal, the T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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