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TMI Blog2009 (3) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... Mrs. Vasanti B. Patel for the Respondent. JUDGMENT The judgment of the court was delivered by R.S. MOHITE, J. - The questions of law which have been referred to this court under Section 256(1) of the Income Tax Act are as follows. 1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in upholding the order of the Commissioner of Income tax (Appeals) that the ITO will recompute the disallowance under Rule 6D by aggregating the expenditure of all tours in place of the present computation of the disallowances made by the ITO on the basis of each trip of the employees? 2. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in upholding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in the case of CIT Vs. Matchwell Electricals (1) Ltd. reported in 263 ITR 227. Following the said judgment, we answer this question in the affirmative and in favour of the assessee. 4. As regards Question No.3, this issue was first considered by the Madras High Court in the case CIT Vs. Engine Valves Ltd. ( Mad. ) reported in [1980] 126 ITR 347. While deciding the question the Madras High Court observed as under. "But, whatever expression we might employ to describe the culinary process, there is no doubt whatever that the use of fuel and other forms of energy in that part of the canteen, would have the same damaging effect on the life of the building as a regular manufacturing process would by the use of plant of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and tube wells)". Under the Factories Act, factories which employ over 250 workmen, are mandatorily required to provide a canteen. The canteen premises is thus a necessary adjunct to the factory building and it is meant for the benefit of the workers. It is also noticed that while making exclusion in respect of various kinds of buildings such as offices, quarters, roads, bridges, culverts, wells and tube wells, no specific exclusion is made for canteens. If canteens were meant to attract the lower depression applicable to general buildings, then it would have been specifically excluded from the term factory buildings as appearing in Appendix-I Part-1(i)(2). We therefore, answer this question in the affirmative and in favour of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he business or profession. 15 per cent of the adjusted expenditure. Explanation- For the purposes of this sub-section- (a) "adjusted expenditure" means the aggregate expenditure incurred by the assessee on advertisement, publicity and sales promotion in India as reduced by so much of such expenditure as is not allowed under sub-section (1) and as further reduced by so much of such expenditure as is not allowed under sub-section (2B) or sub-section (3) : (b)"turnover" and "gross receipts" means turnover or gross receipts, as the case may be, as reduced by any discount or rebate allowed by the assessee. 3(B) Nothing contained in sub-section (3A) shall apply in relation to any expenditure incurred by an assessee on- (i) advertise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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