1991 (11) TMI 38

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..... ellate Tribunal ("the Tribunal" for short) has referred to us, for our opinion, the following question, under section 256(1) of the Income-tax Act, 1961 ("the Act" for short) : "Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 32,382 being 'Guest house expenses' are trading expenses and not disallowable under section 37(4) of the Income-tax Act, 1961 ?" The asse .....

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..... e had incurred was trading expenditure which was allowable as deduction while computing profits under section 28 of the Act. Therefore, according to the Appellate Assistant Commissioner, the question of disallowing the said expenditure under section 37(4) of the Act need not arise. He, therefore, allowed the assessee's claim for deduction of the aforesaid expenditure. On further appeal, the Tribun .....

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..... d it is to provide these facilities that the assessee has taken premises on rent. The expenditure in question was incurred for payment of rent. Since it is the business of the assessee to provide facilities as stated above and it was for the said business it had rented premises and paid rent of Rs. 32,382, it is obvious that the expenditure of Rs. 32,382 is a trading expenditure, deduction whereof .....

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