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TMI Blog1991 (10) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... ease by the assessee is required to be taken into account for computing disallowance under section 37(3A) of the Income-tax Act, 1961. 2. The assessee had taken two cars on lease under an agreement of lease dated 9-4-1983 from Anagram Leasing Pvt. Ltd. The said lease was for a period of five years. Under said lease agreement the assessee took delivery from the suppliers of the cars to whom instr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure on lease rent would be liable to be included for disallowance under section 37(3A) of the Act only if such expenditure falls under any of the three clauses in sec. 37(3B) of the Act. On behalf of the department reliance is placed on clause (ii) of section 37(3B) read with clause (c)(i) of Explanation. The item in clause (ii) of section 37(3B) is " running and maintenance of aircraft and mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hire prior to lease agreement. The delivery of the cars had been obtained by the assessee from the dealer of the cars on the direction of the lessor company. Thus, instead of purchasing new cars from the dealers the assessee took on lease those cars which were purchased by the lessors from the dealers. The cars in question were not meant to be plied on hire prior to the lease agreement. On these f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expenses which are allowable under section 31 would not become disallowable merely because provisions of section 37(3A) would also apply to them in addition to provisions of section 31. In other words, expenses which are allowable as deduction under section 31 do not become disallowable under section 37(3A) simply because they also fall under said provision. This view finds support from the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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